Using funds on pre-closing items...

"Can I use exchange funds that are being held by my intermediary for items like earnest money and appraisals prior to the closing of my new property?”

Yes and no. The intermediary may only advance funds from your exchange account (the money being held from your sale) for items that are refunded if the closing never occurred. Earnest money is the most common example of this.

Although items like survey fees and appraisals are clearly associated with the purchase of the new property, they would not be refunded if the deal fell through. Therefore, exchange funds cannot be advanced for these types of expenses. (However, don’t be confused…. if these items are shown on the settlement statement at the time that the property is purchased, exchange funds sent to the closing can be used for these types of costs.)

--The Experts