Survey: Homebuying Surge Highlights Need for Home Closing Consumer Resources
September 9, 2021
Only one in five homebuyers understand the documents they signed at closing, according to a survey commissioned by Qualia.
Results of the Homebuyer Sentiment Index also found that consumers are acting quickly in a competitive market with nearly a quarter of homebuyers purchasing their home sight unseen. The survey, conducted by independent third-party research firm Savanta Research, polled more than 1,000 consumers.
“This survey emphasizes the need for increased education and transparency during the home buying and selling process,” said Nate Baker, CEO of Qualia. “Our core belief is that technology that powers the transaction is the key to providing that assurance. It can simplify a very complex process to allow real estate professionals to focus on client education and a seamless home buying experience.”
The survey indicated that recent homebuyers found the real estate closing process to be the most stressful and complicated part of the real estate transaction itself. In fact, when Qualia explored the consumer sentiments around the entire homebuying journey, the only thing more stressful or complicated than the closing was the move-in process.
Future homebuyers are also apprehensive about real estate closings. One in four future homebuyers reported that they do not understand the closing process. Qualia’s survey illuminates the value of combining knowledgeable local agents to guide homebuyers through the process with technology that automates real-time transaction updates and offers consumers instant access to information.
Homebuyers Experience Sticker Shock
Despite the requirement of Closing Disclosures to inform homebuyers of their transaction costs, consumers still lack an overall awareness of the costs associated with buying a home. In fact, 44% of recent homebuyers were surprised by higher-than-anticipated transaction costs. Qualia’s survey also found that consumers desire multiple touchpoints to receive information prior to closing. More than half (55%) of future homebuyers would like to receive information face-to-face about the closing process prior to the closing date and nearly half would like to receive information over a secure mobile app or web-based portal (44%). The survey data demonstrates the importance of empowering and educating consumers on whatever channel they choose to engage.
Homebuyers Take Bold Action
Low interest rates and limited housing inventory sparked a competitive housing market. The survey highlighted how far buyers were willing to go to get the house of their dreams. Nearly a third (30%) of buyers paid more than anticipated for their home, and of those who paid more than anticipated, 32% paid $50,000 or more over the asking price. Buyers are also making what they may believe to be calculated concessions, with some removing inspections from the contract (19%) or purchasing the home without seeing it in person (23%).
Millennials Banking on Homeownership
Personal finance struggles and student debt have created roadblocks for Millennials to become first-time homebuyers, but they are not throwing in the towel on homeownership. According to the study, 72% of Millennials that are in the market to purchase a home are currently saving more than $500 a month to do so.
Available Resources
Through the Homeowner Outreach Program, ALTA provides exclusive resources—including blogs, educational flyers, print and digital ads, infographics, posters and presentations—to help ALTA members explain title insurance and the closing process. ALTA members are also listed on ALTA's consumer education website, Home Closing 101.
Contact ALTA at 202-296-3671 or [email protected].