How old were you when you purchased your first home? Were you fairly confident about the process at the time? If recently released survey data is any indication, your age might reveal how much you really understand about the real estate market. The survey suggests that home buying in 2020 is too complicated.
The survey was conducted among 1000 millennials, covering a number of real estate topics. Survey respondents were asked about mortgages, agent commissions, real estate fees, and so forth. Unfortunately, the data shows quite a bit of ignorance among younger buyers on nearly every real estate topic.
A Few Big Take-Aways
Some of the more alarming numbers from the survey offer take-aways for the rest of us. For starters, more than half of those surveyed did not know how to avoid paying private mortgage insurance (PMI) by increasing the down payment amount. Not understanding the relationship between the two can lead to buyers paying too much because by unnecessarily adding PMI to the equation.
Here are a few more take-aways:
- 5% believe that using real estate agents is required by law
- 82% do not know how easy it is to get a real estate license in most states
- 65% do not understand how real estate commissions work
- 42% believe that buyer’s agents can be utilized at no cost.
The survey also suggests that millennials are more likely to use iBuyers to sell an existing home. They prefer the convenience for sure, but they also are amenable to the idea of avoiding the hassles of a more traditional sale. Yet they do not realize how much equity they could be sacrificing when they do so.
Like Buying Anything Else
It is no secret that the real estate industry has gradually made buying and selling houses more complicated over the years. Whether or not this has been done intentionally is a matter of some debate. But at the end of the day, there are some housing advocates who believe that buying a house should be like buying anything else.
In Salt Lake City, Utah, cityhomeCOLLECTIVE and its agents work closely with clients to find their forever homes. Often times that means luxury homes in Salt Lake City’s best neighborhoods. Other times it means modern homes being built in brand-new neighborhoods.
Regardless of the home being purchased, shouldn’t the process be easy and transparent for both buyer and seller? Shouldn’t buyers be provided with a simple, detailed list of all of the fees they will pay written language they understand?
It is a good thing that buying groceries isn’t as complicated. It is even better that very few financial transactions are as complicated as home buying. Otherwise, most of us would not know whether we were coming or going financially.
A New Way to Buy
Buying a home in 2020 is way more complicated than it needs to be. Perhaps the survey data cited in this post could be motivation for someone to come up with a new way to buy. For instance, the automotive sector has developed a unique buying model that eliminates commissioned sales personnel in favor of a more retail-like experience conducted completely online. The price you see on the screen is the price you pay in reality.
If car dealers can come up with a new way to buy, so can real estate agents. The first company to figure out will get a big jump on the millennial market moving forward. If nothing else, millennials do not want complicated lives. They want everything to be plain and simple – even buying a house.