You should be in the best position to serve your customers this year. The best way to do that is to know what consumers were most concerned about in 2019.
Here are the top issues 2019 homebuyers listed in the Mortgage Consumer Survey, and the solutions you can provide to serve your customers.
1. Your clients don’t want unexpected or hidden costs
2019 saw an increase in the number of buyers who said they felt uncertain about the home buying process. They listed unforeseen housing costs as one of the main causes of concern. An increasing number of buyers still paid unexpected or hidden costs in 2019, including home repairs, legal fees and adjustments, despite being aware of this issue.
This could be why according to the 2019 Mortgage Consumer Survey an increasing number of buyers are discussing hidden costs with mortgage professionals.
If you want to best serve your clients, you should be prepared to answer these important questions and help them properly plan.
2. Prepare for an increasing number of homebuyers looking to renovate
Home renovations are popular with Canadians. In the next 5 years, 63% of Canadians are planning to renovate their homes.
Canadians often refinance their homes with the goal to renovate. Sixty one percent of homebuyers who refinanced indicated they were currently renovating their home, up significantly from only 23% in 2018. One of the primary reasons listed for refinancing a home was to renovate.
However, in 2019, about 37% of homebuyers were not aware they could include renovation costs as part of their mortgage, and that number is increasing (up from 31% in the previous year).
More Canadians want to renovate their homes, and an increasing number are not aware of some of the options available to do so. As home renovations become increasingly popular in a low interest rate environment, it is important to have the information ready to serve your client.
3. What clients are looking for in a new home
The best way to serve your client’s needs is by understanding what their true “wants” are versus their “needs.”
The modern Canadian homebuyer no longer feels that “location, location, location” is their primary need. Price and affordability is the focus of the modern Canadian homebuyer–the most important “need” listed by homebuyers.
The “wants,” or in other words, what the homebuyer desires, was quite different. The number one “want” of a buyer is a newly built home. Interestingly enough, this ranked at the bottom of the “needs” of homebuyers.
Seemingly traditionally important factors such as the type of neighborhood, is much more of a “want,” than a “need.”
The difference between wants and needs of homebuyers is quite drastic, and the difference is growing. Homebuyers of 2019 have different preferences, needs and wants, than homebuyers of the past, and understanding this will allow you to better serve them.
4. Homebuyer attitudes towards mortgage professionals
According to the Mortgage Consumer Survey, brokers only follow up with half of their customers after they buy their home. And only a third of all homebuyers were contacted by their mortgage lender after their transaction was completed.
However, homebuyers still feel that face-to-face interactions are very important (73%). Interestingly enough, in an environment of rapid technological advancements, an increasing number of homebuyers want that face-to-face interaction in the homebuying process. Additionally, there was a decrease in the comfort level of managing the entire homebuying process and mortgage transaction without having to meet the mortgage professional (38% in 2019 compared to 45% in 2018).
Technological change and disruption are altering a wide array of industries, yet unlike some other industries, the Canadian homebuyer still values and sees the necessity in face-to-face interactions.
Mortgage professionals would be well advised to follow up with their clients after the transaction to maintain a high level of customer satisfaction. The level of service and interest rate offered are tied as the most common reasons buyers gave for choosing a lender. If you are a lender, offering quality service will help maintain customers who would consider switching for something like a better interest rate . If you are a realtor, our survey showed that homebuyers see value in working with a realtor — it is important to maintain that trust.