REX Customer Survey Reveals COVID-19’s Effects On Home Buying and Selling, Underlines Importance Of Digital Capabilities
The survey results cover effects of low interest rates on buyer behavior, pervasive concerns over real estate fees, and other factors affecting homeowners during COVID-19.
AUSTIN, TEXAS, January 8, 2021 — REX, the tech company resetting the real estate industry, conducted a survey of customers who worked with us since the onset of COVID-19 — the results, released today, show COVID-19’s significant impact on the residential real estate transaction. They also prove REX’s reset of the brokerage model provides transparency and ease for customers at a level unmatched by other real estate companies.
COVID-19 and the Home Transaction
COVID-19 offered an opportunity for our customers to move in ways that worked for them, in ways that may have otherwise been impossible if not for COVID-19.
The pandemic swayed many to buy or sell in 2020; 24% of buyers and 11% of sellers report that COVID-19 affected their decision.
Relocation and working from home
During COVID-19, some homeowners moved away from dense cities — 24% of REX buyers relocated to a less populated area.
Respondents indicated pandemic avoidance as a driving force: “With the ability to work remotely, we decided to move out of the city and into the country closer to our family. We also wanted to be in an area with less exposure,” said Alana Osumi, who sold their home with REX. Another buyer, Nathan Masters, said, “[COVID-19] prompted us to move to a mountain community, away from the city.”
Others moved because the added freedom of work-from-home made living in cities less crucial. “I got [a] work-from-home option from [my] employer so I could buy in a different city,” one buyer said. “We wanted to get out of an apartment and into a single-family home to have more room and [to] work from home,” said another.
Market shifts and economic uncertainty
Approximately a third of buyers and sellers changed the timing of their home transaction due to COVID-19, citing the pandemic as either slowing down or speeding up the process for them.
In some instances, market uncertainty caused homeowners to stall the process, in others, low interest rates pushed them to expedite.
“We were trying to decide if the market [was] going to completely tank or if it’s going to stay stable. We decided to pull the trigger in hopes that values remain high in Portland,” said one buyer. Another was more hesitant: “We nearly did not go through with the purchase of our home due to the uncertainty of the entire economy,” they said.
“[We] thought selling early when it all started made sense, because we were concerned if we waited maybe lenders would change financing guidelines, making it harder for buyers to qualify, or [would] not lend at all,” said one seller.
But low interest rates pushed 37% of buyers to buy a home sooner than planned.
“Interest rates dropped due to the economy, so we decided to buy 6 months before our rental agreement was up,” said Nary Sos, who bought her home with REX.
COVID-19 necessitated better digital capabilities in real estate — making online platforms more important. Nearly 89% of sellers visited more than one online platform to compare prices of other homes in their area. All buyers used multiple online platforms to shop for a home.
In a pattern that predated COVID-19, homeowners increasingly shop for their next home online, without the aid of real estate brokers.
The REX Experience
REX’s ease of use and straightforward, digital platform enabled those buying and selling during COVID-19 to turn away from the exhausting broker-led traditional transaction and eliminate stress.
Turning away from traditional realtors
A majority of REX customers spoke with or interviewed two agents before choosing us — a taxing process, especially during COVID-19. Through our team of advisors and suite of services, REX offers an easier and more efficient approach to completing the transaction.
Serving experienced and inexperienced home sellers
REX serves non-experienced and experienced sellers — those who have never sold a house before, versus those who have sold one, two, three, or more. Sellers were nearly evenly distributed across experienced and non-experienced sellers.
REX works for those unfamiliar with the transaction, who need additional guidance, but is also trusted by those with experience selling a home, who realize the traditional model is unnecessary for a successful sale.
Shared sentiment on fees
Customers reported strong sentiments on transaction fees.
97% of sellers were concerned about real estate fees before learning about REX. Interestingly, 69% of buyers were concerned about real estate fees before learning about REX — still a majority, but significantly less than in the seller demographic — this may be indicative of the broad misconception present across the real estate market that buyer’s agents are free, and that buyers are not charged during the transaction. This misconception has been caused by the National Association of Realtors’ practice of advertising buyer’s agents services as free, a practice which has recently faced scrutiny from the Department of Justice, who sued the NAR for this and other anti-competitive behavior. The DOJ/NAR settlement requires the NAR to stop this practice.
Use of the REX app
The REX app continues to grow as a home shopping platform. Of buyers who downloaded the REX app while working with us, 71% still have it downloaded today.
Survey Metrics and Methodology
The survey was sent to 941 potential respondents (640 sellers and 301 buyers) who bought or sold their home with REX from February 1 to September 15, 2020. The time frame aimed to include all whose transactions could have been affected by COVID-19. The February start date accounts for the fact that the home transaction typically takes several weeks to complete, landing customers in mid-March or later, when COVID-19 was in full swing. The survey received 160 responses from 106 sellers and 54 buyers. The survey opened on November 5, 2020 and closed on December 3, 2020.
Quotes have been lightly edited for clarity.
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