A survey of 2,000 Americans by esurance found that 44% of respondents don’t know what to expect for closing costs and 19% expect to pay “nothing.”
Fourteen percent of respondents expect to pay 2-5% of the home price, another 5% expect to pay 5-8% of the home, and 2% of people expect to pay between 8% and more than 11% of the home.
Closing costs typically account for 2-5% of the total home price.
Aside from the monthly mortgage payments, esurance found that homeowners spend $9,400 annually on their home. Again, respondents are unsure of what to expect.
Forty-three percent responded “I don’t know,” 11% expect to pay less than $1,000, 20% expect to pay between $1,000 and $3,000, 13% think they’ll pay between $3,000 and $8,000, and 6% believe they’ll pay more than $12,000.
The survey found that just 7% of respondents accurately expected to pay between $8,000 and $12,000 a year on their home.
The knowledge gap is apparent across generations as 51% of Gen Z and millennial respondents (between the ages of 18 and 34) don’t know what to expect in home costs.
This number drops to 40% for those aged 35-54 and 39% for homeowners 55 and up.
While 2019 has seen an influx of millennial borrowers, a report by Business Wire earlier this year found that 76% of millennials feel confident about how to sell a home, although having little to no experience, according to a survey from SOLD.com.
While millennials report having confidence, the National Association of Realtors published a report that found that home sellers younger than 28-years old represented just 2% of the homes sold in 2018. The report also found that 76% of older millennials (ages 29-38) were selling a home for the first time.
The survey was compiled in April 2019 and is a sample of 1,000 homeowners.
“In today’s world, it’s easy to build misplaced confidence due to the vast amount of information available online. While having many resources at our fingertips is certainly a good thing, it’s important to utilize them effectively and to realize which ones are trustworthy and unbiased. This is particularly true for millennials who are selling homes for the very first time,” said Matt Woods, President of SOLD.com.