When Do You Truly Own the Home You Purchased?

I read an astonishing statistic today: Zillow reported that about 47% of homebuyers think they own a home once they have signed the purchase contract. Not only did this shock me, but it really made me upset. Someone – the agent – is not communicating. This is way too important to not discuss with buyers, and we have to have that conversation with them, every time!

After reading the statistic and tweeting about it, one of my colleagues responded that his clients changed the locks on their soon-to-be new house, before the close of escrow.

I decided to have a look at our residential purchase contract to find language that specifically states WHEN the buyer owns the home for which the contract was written. I could not find any, but there are numerous mentions of escrow and what happens during that period. I suppose those who drafted these contracts either assumed the buyers would figure it out that escrow must actually close before they become home owners, or assumed their agents would explain this.

While I think maybe the contract drafters may want to consider including a layman’s paragraph about actual ownership and and what point that is established, it is also extremely important for the agents to be sure to educate their buyers. Whether or not my buyers want to read it, I briefly explain what is on each page as they are signing, and always suggest they read it.

The lesson to be learned here is that if you are a real estate agent, you need to be candid with your clients. Explain everything, even if you think your clients already know it, or think it is silly you should do so. Buyers: if you do not understand something please ask your agent – that is their job, they have a fiduciary relationship with you and keeping you informed is of utmost importance.