Commissions are Leading Consumer Complaint of Homebuying Process
ShelterZoom, a blockchain-powered real estate platform, surveyed more than 1,000 U.S. consumers to determine the leading reasons for dissatisfaction. Real estate commissions top the list.
Perhaps the survey’s least surprising finding was the widespread unhappiness with the home-buying process, said Shelterzoom cofounder Allen Alishahi. When asked what is the biggest thing wrong with the process, respondents hit on pain points that anyone who has ever purchased a home has likely experienced: there’s too much paperwork (39%); the process takes too long (36.6%); it’s too confusing (28.2%); there are too many people involved (21.2%), and giving away too much information (17.3%).
On the other hand, almost 30% said there is nothing wrong with the process.
“That figure is also not surprising because in real estate, as in life, it’s all about perspective,” said Alishahi.
Concerns about the homebuying process
When asked about the specific concerns about the home buying process, respondents’ top grievance was their belief that commissions are too high (42.7%). That was followed by a lack of transparency (33%); conflicts of interest (33%); and lack of communication (28.6%).
“I’m not that surprised by these findings, as they have been concerns for as long as I’ve been in the business,” said Alishahi. “But I will add that so much depends on the real estate professional you’re dealing with. As with any profession, many are fantastic and truly take the customer’s concerns seriously and do whatever they can to alleviate them.”
A time-consuming process
When asked about the length of time the home buying process takes, the respondents had some strong opinions.
In order of magnitude:
● It takes a long time to get a mortgage approved: 43.8%
● The contracts take a long time to sign and complete: 35.7%
● There are too many people involved: 33.8%
● Buyers purposefully delay the sale so they can move/close on another house: 25.1%
● The process is too manual: 20.8%
Ideas for making the home buying process easier
Most industry observers agree that there’s room for improvement of the homebuying process. Three ideas, in particular, surfaced with more than 40% of respondents when asked what, if anything, would improve the process:
● The ability to ensure that my offer is presented to the seller and track every step of my offer: 48.1%
● The ability to see how many offers are being made on the home: 46.1%
● The ability to be notified every time a change is made by the seller, broker or agent: 42.8%
Alishahi notes that these desires line up with Shelterzoom’s platform functionality.
Leaving money on the table – on purpose!
Most respondents said the home selling process is so unpleasant that they would leave money on the table to avoid as much of it as possible. When asked if they would be willing to lower the price of their home if it meant not having to deal with the costs associated with home buying (agent commissions, lawyers, home repairs, closing costs, and other hurdles), more than three-quarters (76.2%) of respondents said “yes.”
The price is right?
Respondents were asked to weigh in on listing price. When it comes to listings – specifically, how long consumers would be willing to wait to lower the price of their home if it’s not selling – the findings played out like this:
● One week: 3.5%
● One month: 19.7%
● Three months: 33.2%
● Five months: 17%
● 12 months: 9.4%
● More than 12 months: 5%
● Would not lower the price of my home: 12.3%
An industry resistant to change
Alishahi notes that these pain points are reasons why the iBuyer model is gaining traction. The seller typically receives cash quickly and has more control over closing details. But it might not be worth the tradeoff, depending on the homeowner’s situation.
Adding to the challenges for consumers looking to buy or sell a home is the industry itself, said Alishahi. “While massive in scale (upwards of $200+ trillion globally), the industry has been a laggard with regard to using modern technology. That is changing, albeit slowly…. It is changing to reflect the demands of consumers and real estate professionals alike.”