Home Buyers Turn to Agents for Financing Advice

According to a new Zillow survey, 55% of home buyers say a real estate agent helped them understand the home financing process. By comparison, 32% credit a financial institution for helping them, 30% were helped by a website (30%). Even fewer received the education they needed from a friend, relative, neighbor, or colleague. 

Buying a home can be a confusing and overwhelming process for many people. Learning what they can expect throughout the process is a great place to start. 

And real estate agents—specifically those that take their role as a knowledge broker seriously—are uniquely positioned and qualified to guide buyers every step of the way. 

In Zillow’s survey, first-time home buyers were a bit more likely to indicate they received help from a real estate agent; 58% said as much—versus 53% for repeat buyers. 

Top three challenges prospective buyers discuss with agents

Over half (56%) of the buyers turning to real estate agents for financing advice ranked understanding the costs associated with a mortgage and home payment among their top three challenges. 

After that, buyers ranked understanding how much they can afford (45%) and researching mortgages and rates (41%). 

At the bottom of that list—the topic prospective buyers were least likely to rank among their top three hurdles—was understanding their credit report and credit score (25%). 

Other findings from the Zillow survey

• 28% found it “very or extremely stressful” to save for a down payment on a home
• That stress was more prevalent among buyers of color (34%) and first-time buyers (41%)
• 71% of buyers made at least one sacrifice to build enough savings for a down payment. The most common sacrifices were spending less on entertainment (43%) and postponing or canceling vacation plans (38%)
• 78% of buyers of color and 84% of first-time buyers reported making at least one sacrifice to save enough for their down payment. 
• 73% of buyers paid mortgage insurance, while 27% did not. Among those who paid it, 63% paid it monthly and 37% paid on a yearly basis. 
• Buyers who purchased a home for under $200,000 were more likely to have done so without offering earnest money (17%) compared to those who purchased a home for $400,000 or more (9%). 
• 37% of buyers received a down payment assistance grant to help them finance a home purchase. Nearly a quarter of these (24%) received this grant from a bank and 14% from a credit union. 
• More than one in ten (13%) received a grant from a government institution. 
• Over half (47%) of the buyers of color in Zillow’s survey received some type of down payment assistance—as did 45% of first-time buyers. 

Zillow survey methodology

Zillow Group Population Science conducted a survey of 665 successful buyers and 1908 prospective buyers. 

For the purposes of their study, “successful buyers” are household decision makers of 18+ years of age who purchased and moved into a new primary residence in the past two years. 

“Prospective buyers” are household decision makers 18+ years old who intend to purchase a home in the next year. 

Read the full report for more details. 

Takeaways for real estate agents

Be prepared to offer clear and complete answers to questions from your clients and prospects on the home financing process—as well as any other questions they might have on the housing market, whether it’s a good time to buy (or sell), etc. 

If you don’t take your role as a knowledge broker seriously, neither will the people in your community. And they’ll turn to other agents for the help they need. 

Tune in Monday through Friday to the Hot Sheet to educate yourself on the most up-to-date news on the market and the economy, so you can be the resource your clients need.