Survey finds many home buyers and sellers have more to learn about the process

house_skySurvey finds many home buyers and sellers have more to learn about the process

November is Financial Literacy Month but a recent survey by the Real Estate Council of Ontario (RECO) reveals that a surprising number of homeowners don’t know the facts when it comes to one of the biggest financial decisions of their lives; buying or selling a home.

A new survey by RECO reveals 41 per cent of Ontario homeowners and 45 per cent of first-time homebuyers wish they had done something different when buying or selling their home.

Among things buyers/sellers reported wishing they had approached differently when purchasing or selling their home was having a better grasp of the process (buying process: 26 per cent; selling process 12 per cent), seeing more houses (buying process: 21 per cent), having a home inspection (buying process: 15 per cent), spending more time researching and interviewing real estate professionals before selecting one (selling process: nine per cent), and understanding the associated contracts better (buying process: 14 per cent; selling process: nine per cent).

“Buying or selling a home can seem confusing and stressful to many,” RECO Registrar Joseph Richer observed. “But there are steps everyone can take to make the process easier, and more satisfying, including brushing up on the basics, doing some homework, asking the right questions and working with a registered real estate professional.”

A further 32 per cent of first-time homebuyers reported that they did not feel prepared and knowledgeable about the process, and only half of Ontario homeowners aged 18 to 34 felt they were prepared and knowledgeable about it.

“These results are a telling reminder that a good understanding of the real estate process can lead to fewer long-term regrets,” Richer said. “This is why we are launching Fact or Fiction — a public education campaign to educate Ontarians about the real estate industry and what resources are available to help them when making such an important financial decision.”

The study, kicking off Financial Literacy Month, was hosted on the Angus Reid Forum for RECO as part of a province-wide public-education campaign to inform Ontarians about common real estate myths. The campaign also includes a fun, interactive online quiz that invites Ontarians to put their real estate knowledge to the test.

Real estate fact or fiction

The survey reveals that a surprising number of Ontario homeowners don’t know the facts when it comes to undertaking one of the biggest financial decisions of their lives, regardless of their age or previous experience buying or selling a home.

Contract confusion

• Fifty-two per cent of those surveyed incorrectly think buyer and seller representation agreements are standardized, when many terms and conditions in real estate contracts, such as how long they will remain in effect, are actually to be discussed between the brokerage and the client.

• Forty-three per cent report there were sections of the real estate contract when they bought or sold a home that they did not fully understand.

• More than one-third of Ontario homeowners (36 per cent) mistakenly think that after a real estate contract is signed, a buyer or seller has a trial period during which they can cancel it, and an additional 33 per cent said they do not know.

• Twenty-six per cent incorrectly believe that signing a representation agreement to buy or sell a home with one brokerage doesn’t limit a buyer or seller from working with representatives from another brokerage (21 per cent did not know).

“Every home is unique and so is the contract to buy it or sell it,” Richer observed. “Signing your name on the dotted line is not something to be taken lightly when you’re dealing with binding contracts for significant values, so we encourage home buyers and sellers to be comfortable with the details before they sign anything.”

Multiple representation

• A majority of respondents (58 per cent) could not identify the conditions under which a real estate professional could represent both a buyer and a seller in a transaction.

• Only 42 per cent correctly know that real estate professionals may represent both sides in a deal only if the parties agree to “multiple representation” in writing. (Nineteen per cent incorrectly think real estate professionals are able to act for only one party).

Deposits

• Fifty-five per cent incorrectly believe that if you place a conditional offer on a home and the deal doesn’t proceed, you automatically get your deposit back. In fact, a deposit — which is held in trust by a brokerage — can only be released if both buyer and seller agree, or by court order.

“As the regulator mandated by provincial law to regulate the real estate industry in Ontario, RECO is committed to helping people better understand the ins and outs of buying and selling homes,” Richer said. “We encourage buyers and sellers alike to work with a registered real estate professional and to feel free to ask any questions they might have throughout the process.”

In addition to survey research, RECO’s public education campaign features a suite of consumer information including:

• Online interactive game to inform Ontarians about real estate myths: www.recofactfiction.ca

• Information about buying and selling a home: http://bit.ly/1wyuLeW

• Sharable content and facts through Facebook and Twitter: https://www.facebook.com/RECOhelps and https://twitter.com/recohelps

• Video series on common pitfalls of buying and selling a home and how to avoid them: https://www.youtube.com/user/RECOhelps

• Targeted online advertising.

To confirm if a real estate professional is registered with the provincial regulator, consumers can visit www.RECO.on.ca to search an online database of brokerages, brokers and salespeople. By using a registered real estate professional, Ontarians not only receive important and objective information that will help them make informed decisions, they are also assured that their representative must adhere to strict professional standards.