Recently, ERA Real Estate quizzed 1,000 Americans to find out how knowledgeable they are about real estate. Some were homeowners, others were not. Some were young, others were not. Some were well aware of standard real estate concept, others were not.
The most shocking finding from the survey results is that homeowners who bought a home within the past year scored five points lower than those who had bought a home more than two years ago.
How can this be, especially in an era where consumers rely so heavily on the internet for research before ever calling an agent, and homebuyers are in a perpetual loop of information validation between Google, social media, and their agent?
Charlie Young, president and CEO of ERA Real Estate believes this is likely a reflection of last year’s more fast-paced market characterized by rapid price increases, bidding wars and a summer spike in mortgage rates which created a greater sense of urgency in completing a deal, leaving less time for understanding the process.
ERA says this knowledge gap underscores the importance of working with a real estate professional, and we see it as the perfect statistic for agents to flaunt, asserting their value, not as the hoarder of MLS data (as is often the accusation), but the professional whose brain is full of information they’re willing to share with homeowners to insure the success of their homeownership.
Respect your elders, for their real estate IQ is higher
ERA reports that homeowners and people over 30 scored higher on the quiz than non-homeowners and people under 30, and among all respondents, the average score was 73 percent.
Overall, the younger the respondent, the lower their real estate IQ, and conversely, older respondents scored higher. Not surprisingly, people who do not own a home are less knowledgeable about real estate than homeowners. Respondents under 30 scored an average of 62 percent, while people over 60 averaged 78 percent. Homeowners scored an average of 76 percent; non-homeowners averaged 64 percent.
Not surprising, but slightly disappointing is the fact that 75 percent of people didn’t know that the Case-Shiller Index tracks home prices.
ERA notes that the survey results indicate that real estate agents have an opportunity to serve as a resource to help consumers better understand the mortgage process as it relates to appraisals, credit scores and federal loan programs.
What did people score well on?
Fully 95 percent of people knew what a foreclosure was, and over 90 percent knew the difference between homeowner’s insurance and a home warranty, and knew that home owners’ insurance was different than PMI.
Only 67 percent of non-homeowners knew what an appraisal was compared to 81 percent of homeowners, another indication that education on the mortgage process is an opportunity for agents to provide superior service.
“The business of buying and selling a home has become increasingly complex and multi-faceted as we contend with the checks and balances put in place following the Great Recession,” said Young. “Our findings suggest that real estate professionals can provide an invaluable service to their clients by not only educating them on many of the processes involved in buying or selling a home but also by connecting them with experts in related industry services.”