What occurs after both the buyer and seller sign a purchase agreement and earnest money is given?

After both the buyer and seller sign a purchase agreement and the earnest money is provided, the escrow process begins. This stage is critical as it involves a neutral third party who holds the earnest money and prepares for the closing of the transaction. The escrow agent ensures that all terms and conditions outlined in the purchase agreement are met before the sale is finalized.

During escrow, various activities occur, including the title search to ensure the property title is clear and free of liens, the buyer's inspection period for property condition assessments, and lenders’ preparations for financing. However, these processes happen concurrently within the escrow period, marking it as the pivotal phase that encompasses all subsequent activities leading toward the finalization of the sale.

Understanding the significance of the escrow process is essential for grasping how the contractual obligations are executed in real estate transactions.