# Escrow / holdback

Purchase money held at closing to cover claims that surface later.

It is the practical security behind the [reps and warranties](https://searchspheresource.com/glossary/reps-and-warranties) on deals too small for the insurance products larger transactions use. When a rep breaks, recovery is a claim against money already set aside rather than a lawsuit chasing a seller who has retired on the proceeds, so the size and release timing of the holdback are worth negotiating up front.

In numbers: A 10% holdback on a $4M deal parks $400k with a neutral agent for 12 to 18 months; when a rep breaks, recovery is a claim against known money rather than a lawsuit against a retired seller.

Source: https://searchspheresource.com/glossary/escrow-holdback
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt