Buyers most likely to turn to agents with financing questions
A survey of homebuyers reveals which parts of the financing process buyers understood the least, and how agents can add value through financial education.
Key points:
- Over half of buyers go to their agent for education on the home financing and mortgage process, a Zillow report found.
- Buyers surveyed said that the thing they needed help with the most was understanding the costs associated with a mortgage.
- The survey also looked at what things buyers sacrifice to save up for their down payment.
One of the biggest hurdles to homeownership is simply saving up enough cash for a down payment and closing costs. Most buyers understand that purchasing a home is a costly endeavor that requires them to budget wisely and seek the best possible mortgage rate.
But when buyers want to learn more about the financial aspects of purchasing a home, who should they turn to? Friends and family? Real estate gurus on social media?
A recent survey from Zillow found that the majority of buyers were educated about the home financing process through a real estate agent. Approximately 58% of first-time buyers and 55% of second-time buyers said their agent was an important resource when it came to understanding mortgage costs.
Agents beat out financial institutions, the internet, and buyers' friends, family members and colleagues as a key source of home financing information.
The survey also asked buyers which parts of the home financing process were the most challenging or unclear. Over half the respondents said that they needed help understanding all the costs associated with their mortgage payment. Over 40% said they needed help understanding how much home they could afford and how to research mortgage rates.
The findings are perhaps not surprising, as financing is one of the more opaque parts of the purchase process.
The survey results suggest that in addition to being experts on the actual process of buying and selling homes — the negotiation, contingencies, and closing — agents are viewed by their clients as being experts on home financing. Or at least, buyers look to their agents more than anyone else for that type of education.
Which means that agents can bring even more value to client relationships by staying up to date on financing basics as well as sharing information on a range of financing options, such as zero-down loans and rate buydowns.
Regardless, saving up for a home is stressful and takes sacrifice. The top sacrifice buyers made to save for their down payment was cut down on entertainment, including eating out and going to concerts and movies. And about a third of buyers postponed or canceled their vacation plans. Another third of respondents said they either took a second job or worked more hours to save money.