Preliminary Steps to a Closing

Earnest Money and Additional Deposits: The closing process begins the moment a purchase contract is signed. The first tangible step is the deposit of earnest money by the buyer. This money serves as a sign of good faith, showing the seller that the buyer is serious about the transaction. The funds are typically handed over to a neutral third party, such as a title company or attorney, to be held in an escrow account. In some contracts, the initial deposit is small, and the agreement requires the buyer to make an additional deposit within a specified number of days to further secure the deal.