MADISON, N.J., April 23, 2014 /PRNewswire/ -- Homeowners and people over 30 scored higher on a 13-question "Real Estate IQ" quiz than non-homeowners and people under 30, according to ERA Real Estate, a global franchising leader. Among all respondents, the average score was 73%, demonstrating a consumer knowledge gap that underscores the importance of working with a real estate professional.
The majority of respondents were familiar with foreclosures, short sales and homeowner's insurance, but the survey results indicate that real estate agents have an opportunity to serve as a resource to help consumers better understand the mortgage process as it relates to appraisals, credit scores and federal loan programs.
"The business of buying and selling a home has become increasingly complex and multi-faceted as we contend with the checks and balances put in place following the Great Recession," said Charlie Young, president and CEO of ERA Real Estate. "Our findings suggest that real estate professionals can provide an invaluable service to their clients by not only educating them on many of the processes involved in buying or selling a home but also by connecting them with experts in related industry services."
While the majority of respondents (95%) knew what a foreclosure was, only 25% knew that the Case-Shiller Index tracked home prices. This knowledge gap in terms of real estate market indicators provides real estate agents with an opportunity to educate their clients about local market conditions to inform both the buying and selling of homes.
Surprisingly, homeowners who bought a home within the past year scored five points lower than those who had bought a home more than two years ago. Young believes this is likely a reflection of last year's more fast-paced market characterized by rapid price increases, bidding wars and a summer spike in mortgage rates which created a greater sense of urgency in completing a deal, leaving less time for understanding the process.
Other findings from the ERA Real Estate IQ quiz include:
Overall, the younger the respondent, the less knowledgeable he/she is about the topics. Conversely, the older the respondent, the more he/she knew. In addition, people who do not own a home are less knowledgeable than home-owners.
More than 90 percent of respondents knew the difference between home owner's insurance and a home warranty, and knew that home owners' insurance was different than PMI.
Only 67 percent of non-homeowners knew what an appraisal was compared to 81 percent of homeowners, another indication that education on the mortgage process is an opportunity for agents to provide superior service.
Overall score on the quiz was 73%. Respondents under 30 scored an average of 62%, while people over 60 averaged 78%. Homeowners scored an average of 76%; non-homeowners averaged 64%.
Take the ERA Real Estate IQ Quiz: Click here to take the quiz to find out your Real Estate IQ.
Methodology: ERA Real Estate, in conjunction with Test Track, Inc., a consumer research company, conducted an online survey of consumers aged 21-75 to ascertain respondents' knowledge in various aspects of the real estate industry and transaction. The survey was fielded between from Jan. 13-20, 2014 and the results are based on responses from 1,000 respondents across the country.
ERA Real Estate is an innovative franchising leader in the residential real estate industry with 40 years of experience in developing consumer-oriented products and services. The ERA network includes approximately 31,000 brokers and sales associates and approximately 2,300 offices throughout the United States and 33 countries and territories. Each office is independently owned and operated. ERA Real Estate is a subsidiary of Realogy Holdings Corp. (NYSE: RLGY), a global leader in real estate franchising and provider of real estate brokerage, relocation and settlement services.