By Allen Alishahi
When it comes to things that consumers have strong opinions about, buying and selling real estate are undoubtedly near the top of the list. Having been in the industry for more than 30 years and founded several real estate firms, trust me when I tell you that I am acutely aware of this! I also live in New York City, where you rarely have a conversation with anyone longer than five minutes which does not veer into real estate.
My current company is ShelterZoom, which I co-founded in 2017 with our CEO, Chao Cheng-Shorland. As a company that builds blockchain-powered solutions tailored to real estate use cases (among other industries), having an awareness of what everyone involved in the industry thinks is part of our corporate DNA.
Now, being aware is nice and all, but without data to back up our opinions about what people actually think about real estate, they are just that – opinions. So we commissioned a survey of more than 1,000 U.S. consumers from Propeller Insights from which we extracted some compelling statistics about the home buying and selling processes.
Below are some of the most interesting findings. If you have some additional angles you’d like us to explore, please drop us a line.
Think the home buying process is painful? You are far from alone.
Perhaps the survey’s least surprising finding was the widespread unhappiness with the home buying process. 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 opposite end of the spectrum, 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!
Concerns about the home buying process
Related to the above question, we asked about the specific concerns respondents have about the home buying process. Topping the list? Commissions are too high (42.7%). That was followed by: lack of transparency (33%); conflicts of interest (33%); lack of communication (28.6%); and the agent can’t be trusted (21.9%).
I’m not that surprised by these findings, as they have been concerns for as long as I’ve been in the business. 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. Others don’t.
There’s long, and then there’s the home buying process
Digging a little deeper into the length of time the home buying process takes, the respondents, not surprisingly, 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%
When you consider how fast everything moves these days – thanks in large part to technology – and how short attention spans and expectation spans have gotten as a result, the home buying and selling processes are even more of an anachronism than they were just a few years ago.
On the flip side…there are popular ideas for making the home buying process easier
Based on the above results, it’s safe to say that there’s room for improvement of the home buying process. Three ideas, in particular, surfaced with more than 40% of respondents when asked what, if anything, would improve the home buying 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%
These consumer desires all match up perfectly with ShelterZoom’s platform functionality. We knew they would, but it’s rewarding to see real people confirm our thinking.
Selling a home and leaving money on the table – on purpose!
Switching gears to attitudes about the home selling process, it’s so unpleasant that most respondents 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 listing waiting game
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 notlower the price of my home: 12.3%
The iBuyer is officially a thing. But is it a good thing?
I’d be remiss if I didn’t address iBuyer, a real estate technology trend that has gained some traction among forward-thinking consumers. An iBuyer is basically a business model where a company uses a technology platform to programmatically assess real estate property values and make instant offers. If the owner accepts, the iBuyer does everything else related to selling the property.
Yes — a very different model than the traditional process. The seller typically receives cash quickly and has more control over moving. But is it worth it? With the caveat that everyone’s situation is unique, the prevailing attitudes expressed in our survey certainly point to a trend of real estate professionals AND consumers valuing the much more robust ShelterZoom platform – with its inherent speed, efficiency, transparency and ease of use – over the more bare-bones and limited iBuyer model.
The net-net – and how ShelterZoom is upending home buying and selling
Many of these results underscore the reasons why we built ShelterZoom’s blockchain-powered platform for buying, selling and renting real estate. The process – as clearly delineated by the survey respondents and millions like them – is too slow, too inefficient, too opaque and too expensive for many. And it has been for a long time.
Adding to the challenges for consumers looking to buy or sell a home is the industry itself. 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. But the fact that it is changing to reflect the demands of consumers and real estate professionals alike makes ShelterZoom possible.
Related to the slow pace of change, the survey makes it clear that consumers are frustrated with the obstacles that, until recently, have been an unavoidable part of the buying and selling processes. They are also keenly aware of these obstacles and not afraid to look to technology like ShelterZoom’s to bypass them.
This rang especially true with regard to “what’s wrong” the buying process, as the large percentage of responses citing too much paperwork, takes too long, too confusing and too many people involved will attest.
The same sentiment surfaced with ideas for improving the home buying process, with tracking every step of an offer, see how many offers are being made and being notified every time a change is made by the seller, broker or agent all garnering mentions by more than 40% of respondents.
We’re all in this together – so let’s all succeed together
ShelterZoom has upended the industry for the better – for consumers and real estate professionals alike. Our secure online platform manages all aspects of the offer and acceptance process. It leverages blockchain to record every transaction and deliver a new level of transparency, efficiency and trust to home buying and selling. And the platform’s customizable widget, mobile application and dashboards give brokers and agents the control to interact with buyers and sellers in a transparent sales environment for a more efficient and paperless transaction. In other words, all the things consumers say they want!
Sure, we used our instincts and vast business experience to come to these conclusions. Now we have data to back them up and give us more confidence that we are on the right path.
If all this sounds intriguing, sign up today!