Final answer:
Closing Instructions should be signed by the Title deadline when an entity other than a brokerage is holding earnest money in a real estate transaction. This guarantees clarity and agreement on the terms of the earnest money and confirms responsibilities for holding the funds.
Step-by-step explanation:
When earnest money is held by an entity that is not a brokerage firm in a real estate transaction, the Closing Instructions should indeed be signed by the Title deadline. This is integral because it ensures all parties are clear on who is holding the earnest money and the terms associated with its release or forfeiture. The earnest money serves as a good faith deposit from the buyer to the seller, indicating the buyer's seriousness in proceeding with the transaction.
The Title deadline is typically a date before the closing date by which all necessary documents must be signed and finalized. Having the Closing Instructions signed by this deadline helps prevent any misunderstandings or disputes regarding the earnest money and its conditions, and confirms the responsibilities of the entity holding the funds.
It is essential that all parties involved in the transaction read and understand the Closing Instructions before signing, as it is a legally binding document that outlines the procedural steps necessary for the completion of the property sale.