About two-thirds of millennials, adults between the ages of 18-34, who plan to become Vero Beach home buyers are largely unaware of closing costs, creating a form of "sticker shock" for the largest generation in history.
The finding comes from a survey by ClosingCorp. Across all adult age categories, more than one-third of potential homeowners are "Not Very" or "Not At All" aware of closing costs.
First Time Vero Beach Home Buyers Waiting Longer
Why is this closing-cost ignorance important? Mostly because the housing market has seen diminishing sales among first-time Vero Beach home buyers, and millennials are waiting longer to buy their first homes than previous generations. These factors are affecting the market's recovery.
Moreover, closing costs can be substantial, as most experienced borrowers know all too well. Closing costs are paid when a real estate transaction closes, and the title to the property is
transferred to the buyer. Closing costs typically amount to 2 percent to 5 percent of the total purchase price of a home.
The fees are incurred by either the buyer or the seller, and typically cover everything from appraisal, inspection and attorney's fees to home warranties.
The study emphasizes the need to better educate millennials, and all consumers in general, on the real estate closing process. While interest rates are often the driving force in initiating a real estate transaction, the real estate agent, lender, title and other settlement fees also have a significant impact on the down payment and cash outflow from the borrower perspective.
The ClosingCorp survey of more than 1,000 adults also showed that most young people learn about closing costs from their real estate agent, or by doing their own research. Millennial homeowners are more likely to learn about closing costs from a real estate agent as opposed to a lender by a ratio of nearly two-to-one.
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