A couple of interesting surveys have been released in the last couple of weeks and considering November is Financial Literacy month, I thought I’d share the findings.
RECO highlights knowledge gap for homebuyers
The Real Estate Council of Ontario chose to highlight that November is Financial Literacy Month with a survey that reveals that a surprising number of Ontario homeowners still don’t understand the buying and selling a home process.
According to RECO’s survey more than a third (36%) of Ontario homeowners mistakenly thought that after signing the Purchase Sale & Agreement (known as the PSA in realtor speak) the buyer or the seller had a trial period during which they could cancel the contract.
Even more worrisome is that 55% of homebuyers that thought you would automatically get their deposit back if the sale falls through. The law stipulates that a deposit is held by the listing brokerage in a trust account; the money can only be returned if both the buyer and the seller agree, or if there is a court order. And court orders take time and money. For more on deposit issues, please read Toronto Star columnist, Mark Weisleder’s piece.
Perhaps at the heart of these misunderstandings is the fact that almost half of homeowners (43%) don’t understand at least one section of the PSA contract they signed. While the PSA does vary from jurisdiction to jurisdiction, the content is the same and a good way to educate yourself is to read the Toronto Real Estate Board’s plain language version—which offers red text explanations of each section to help you better understand what you are agreeing to by signing the contract.
To learn more about the home buying and selling process you can go to RECO’s Fact or Fiction campaign, which offers tips on the questions you should ask your realtor and also has an online interactive game that tests your real estate knowledge.
We need mortgage help, poll finds
Yes: there is an abundance of information on the Internet about mortgage rates and mortgage terms. Yes: media outlets almost instinctively cover off the RRSP vs. paying down mortgage debate on a semi-annual basis. But despite the abundance of resources on all things to do with mortgages, more than 60% of Canadians say they still need help when shopping for a mortgage, according to the latest Ratesupermarket.ca poll.
Released in late October, the poll also found that 27% of would-be homeowners didn’t think a face-to-face discussion with a mortgage professional was important—with the majority of mortgage shoppers satisfied with a telephone call or a video Internet discussion.
Interestingly, the RateSupermarket.ca poll shows that 56% of homeowners would not go to a bank for mortgage advice, however in a similar type of poll conducted by Canadian Association of Accredited Mortgage Professionals (CAAMP) late last year, 72% of homeowners said they’d contacted their bank rep regarding their mortgage.
Web plays a larger role in mortgage selection
Going back a few months to May is another survey released by the Canadian Mortgage and Housing Corporation (CMHC). This poll shows that Internet usage by first-time homebuyers continues to rise. The survey found that 84% of first-time buyers went online to gather information about mortgage options and features, while only 76% of repeat mortgage consumers went online.
But the biggest surprise is that 40% of first-time homebuyers now use social media in their online research for mortgages—this is almost twice as many repeat mortgage consumers who use social media in their mortgage search.
The increased use can be attributed to the fact that more and more consumers are using social media to review or rate their broker or lender. Apparently 1 in 5 went online to rate their broker/lender, while another 30% used social networks to find referrals for mortgage professionals.
Another way first-time and repeat mortgage consumers found useful information was through online forums and blogs: 44% of those that used blogs rated them as “very useful” during their mortgage research.