According to Qualia’s Homebuyer Sentiment Index, of 1,000 homebuyers polled by third-party research firm Savanta Research, only one in five said they understood all the documents they signed at a closing.
With homebuyers acting quickly in a competitive market, as nearly a quarter of homebuyers are purchasing their home sight unseen, the findings underscore the risks consumers take when they act too quickly without understanding the process or transaction costs involved, according to Qualia.
“This survey emphasizes the need for increased education and transparency during the homebuying and selling process,” Qualia CEO Nate Baker said in a release. “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 homebuying experience.”
The survey showed how far buyers were willing to go to get the home of their dreams in a competitive market. About a third (30 percent) of buyers paid more than anticipated for their home, and of those, 32 percent paid $50,000 or more over the asking price.
Buyers also were willing to make concessions, with 19 percent removing inspections from the contract and 23 percent purchasing the home without seeing it in person. And 41 percent said they were willing to live outside of their ideal location, compared with just 26 percent pre-pandemic.
Recent homebuyers found the closing process to be the most stressful and complicated part of the real estate transaction itself, with the only thing cited as more stressful or complicated being the move-in process. One in four future homebuyers reported that they do not understand the closing process.
Most homebuyers (54 percent) reported their real estate agent was their main point of contact throughout the closing process, compared with 28 percent citing their title and escrow company or attorney, and 18 percent their lender.
The survey also indicated homebuyers still lack an overall awareness of the costs associated with buying a home, as 44 percent of recent homebuyers polled were surprised by higher-than-anticipated transaction costs.
Most future homebuyers desire more information prior to closing, with more than half (55 percent) saying they would like to receive information face-to-face about the closing process prior to the closing date, and 44 percent wanting information over a secure mobile app or web-based portal. Gen Z and millennial homebuyers were more likely than Gen X or the boomer generation to want materials ahead of the closing date.