45% of Homebuyers Sign Documents They Don’t Understand

Nearly half (45%) of recent homebuyers said they signed documents they didn’t fully understand when purchasing their home, according to a survey by Smallpdf. 

The documents that they found most confusing were: 

1. Escrow instructions (31%) 
2. Title insurance (26%) 
3. Closing disclosure (21%) 
4. Property disclosures (19%) 
5. Homeowner’s insurance documents (19%) (tie) 
6. Purchase agreement (18%) 

Additionally, they reported that they spent an average of seven hours reviewing, signing and managing closing documents, but they only actually read 61% of the documents presented during closing.  

The top reasons homebuyers signed closing documents without fully understanding them were: 

1. Too many documents to review thoroughly (40%) 
2. Language was too complex or technical (31%) 
3. Trusted the process, didn’t think it necessary (25%) 
4. Felt pressured to sign quickly (24%) 
5. Assumed agent or attorney reviewed them (24%) (tie) 

Paperwork proved to be a key stressor for more than 1 in 4 (27%) buyers, who described this part of the homebuying process as very or extremely stressful. 

So what do homebuyers want most at closing? The survey said: 

1. Clearer, plain-language explanations (61%) 
2. Shorter, more concise documents (59%) 
3. Fewer total documents required (38%) 
4. Visual summaries or infographics (16%) 
5. Standardized formats across all transactions (15%) 

While Realtors® may not be able to reduce the number of forms required in a homebuying transaction, they are trusted real estate experts who can provide guidance and explain the process along the way, making it easier to understand and helping buyers feel more confident in their purchase.