What is the money that is held in escrow for when doing a U and O?

We are closing on our home tomorrow but are not moving out until next week.

We are keeping $2500 (which I think is high) in escrow. I keep hearing mixed things as to what it is for.

Re: What is the money that is held in escrow for when doing a U and O?

I think $2500 actually sounds on the low side -- when I've been involved in sales where the seller stays on a few days after closing, usually more $ is held in escrow.

Typically, it's to cover the expenses the buyer is incurring by owning the home (prorated share of mortgage, taxes, utilities).

Plus, money is held in escrow to cover any damage that may happen to the home while you are still living in it. In a usual scenario, the seller moves out, the buyer does the final walk through, and the closing happens and buyer takes possession. But in your situation, what would protect the buyer if you made a gigantic hole in the wall or decided to take all of the light fixtures? They've already paid for the house! But if money is held in escrow, they can notify their attorney of any damage when they take possession and the attorneys can negotiate a credit to the buyer out of the money in escrow.

That's my understanding at least - maybe others can shed more light! Did you ask your attorney?