What Younger Homebuyers Don't Know About Homebuying
The next generation is now the generation that are ready to become homeowners. With all the information that is out on purchasing a home, the complexities and the misunderstandings that come with buying a home can hinder or confuse those that want to take the next step. This is understandable because real estate and mortgages packaged together can leave people with more questions than answers in the process. Based on a survey done by the real estate group Homie.com, out of 1,000 millennial individuals these are the results that were shown regarding home buying and real estate topics.
About 42% of respondents thought that using a buyers agent was free -
To add to that statistic, around 65% of respondents did not know about the commission fee of 6% for the realtor. This comes as the rise of the iBuyer has become something that younger home buyers are looking to for their transactions. In reality, those who use an iBuyer are likely to pay more in commissions than the traditional agents commission rate.
85% of respondents did not know it only takes about 1-3 weeks of training to get a real estate license -
This is probably the reason why we see so many real estate agents ready for business and probably why a majority of realtors not capturing the bulk of the home sales that they could because the market is oversaturated with licensed agents to choose from. As the old saying goes, its only 1% of the people that do 90% of the business. This might also explain why many home buyers who utilize younger and less experienced agents find themselves with more questions left unanswered because the situations never gave rise to what the buyers were looking for. This leads to turnover in agents and potential sales fall through the cracks at the start.
50% of respondents do not know how much money they need for a down payment -
It is typical in times past that the traditional down payment that is needed for a home is around 20%. Times have changed to help accommodate for different financial scenarios but what is fascinating is that many respondents in this survey have stated they did not know how much to put down on the home in order to purchase the home. Another thing that millennials surveyed did not know was the amount needed as a down payment in order not to have private mortgage insurance or PMI. However, with a good lending program, anyone will be able to know exactly what they need to do for their financial scenario to work out.
87% are unsure of the process to buy and sell a home -
While home buying is something we have seen our relatives or parents do as we grow up, we don't necessarily jump into the fine details and processes that have to happen to get a name on a deed to a house. Buying a home also does not fit into the current curriculum of the day either, so this shows that many younger home buyers have no real idea how to start and navigate home buying. iBuyer services help younger generations purchase homes but they really only take more in commission than from a traditional sale and you would have to read all the fine print yourself when you could have a realtor and mortgage professional help you along the way.
There are plenty of resources online and around your neighborhood that can help first time home buyers make their major transactions without any hesitations or hiccups. In the end, it is better to work with a team of licensed and experienced professionals that can take care of your best interests in the process of purchasing something as huge as a home. This can be on the of the biggest transactions you will ever make in your life, so you want to work with those that have seen many situations, but more importantly, know how to navigate away from the potential head winds and traps that might arise during a transaction.