Closing on a place where the previous owner built a 12x16 shed directly over the drain field, concrete slab and all

Closed something similar in Hemet about four years ago, different county but same RCEH jurisdiction essentially. The lender was a portfolio shop out of Murrieta, not a conventional conforming operation, and they accepted a written hold-harmless addendum combined with a contractor bid and a demolition escrow holdback. We put $6,500 into a holdback account at closing, demo happened day eight after keys, reinspection happened day twelve, cert issued, holdback released to seller minus actual costs. The number matters: it has to be large enough that the seller is motivated to schedule the demo fast, because once they have keys-in-hand that motivation tends to evaporate quickly. $3,200 straight to seller before a cert exists is the wrong structure entirely.

The part you left out that decides basically everything here: is your lender a conventional conforming shop or do they have any portfolio product? If you are sitting in a Fannie or Freddie box, the holdback escrow path is nearly impossible, they want the cert before funding, full stop, and you are either renegotiating the timeline with the seller or you are walking. If there is any flexibility on loan product you have about a ten-day window to make a call, because requalifying mid-escrow eats time fast and 21 days is already tight for Riverside County turnaround on a reinspection after demo.

Seller's $3,200 demo quote is low, we saw $5,800 for a smaller slab pull in Murrieta last spring.