I have not personally been involved with a case where a buyer ever was able to receive cash back. Whenever there are credits back to the buyer for repairs, then escrow will need to have invoices from the contractors and escrow will hold the excess funds for those contractors until work is completed. In the case where there are credits granted for closing costs, (recurring or non-recurring) if those credits EXCEED the closing costs then the money goes back to the entity that granted the credits. Never, have I seen, that cash will go to the buyer. That indeed would be flagged by the lender.
Now granted I am only a pup so I am sure more experienced people have seen more. I am not saying it doesn’t happen or hasn’t happened.
