- Love at first sight: 80 per cent of likely buyers know if the home is right as soon as they cross the threshold
- Buyer beware: Canadians are more concerned about finding something wrong with the home post-purchase than a potential drop in real estate prices
- 'Stress'-tested: Report also reveals emotional state and motivations of prospective buyers, including first-timers
TORONTO, ONTARIO--(Marketwired - May 2, 2013) - According to the BMO Psychology of House Hunting Report, Canadian homeowners spent an average of five months house hunting and visited ten homes before making the decision to buy.
The report, released today and conducted by Pollara, is the fourth in a series from BMO that examines the personal finance and investing behaviours among Canadians. Key findings include:
- Eighty per cent of prospective buyers know if a home is right for them as soon as they step inside
- However, 68 per cent of likely buyers are willing to settle for a home that's less than 'perfect'
- One-third (33 per cent) feel rushed into making a purchase - a number that rises to 39 per cent among first-time buyers
- The biggest worry on the minds of home buyers is finding something wrong with the home after the purchase (71 per cent), followed by a post-purchase drop in prices (55 per cent)
"It's important to take a practical approach when house hunting and have a clear idea of where you stand financially to ensure you make a responsible home buying decision," said Laura Parsons, Mortgage Expert, BMO Bank of Montreal. "Doing research ahead of time and setting realistic expectations can help you avoid making an uninformed or rushed purchase."
Motivations: Not Just About the Bottom Line
According to the report, 44 per cent of current homeowners say they bought their home because they felt it was a good investment; 37 per cent stated they were motivated to buy because they felt the time was right to get into the market. Another 23 per cent bought because they wanted to move to a new neighbourhood, and 18 per cent bought because their family was expanding.
House Hunting: A Love/Hate Relationship
The report revealed that Canadians experience a wide array of emotions when buying a home:
- Excitement (48 per cent), cautiousness (41 per cent) and optimism (31 per cent) are the top emotions identified
- One-quarter (25 per cent) say the process is stressful, and 21 per cent say it makes them feel anxious
- First-time buyers are more likely than the average home buyer to be stressed (30 per cent versus 25 per cent) and anxious (25 per cent versus 21 per cent) about the home buying process, while less likely to feel optimistic (23 per cent versus 31 per cent)
"Buying a home is one of the biggest investments Canadians will make in their lifetime, so it's wise to take time and get the guidance of a professional to help ease stress and mitigate any financial pitfalls that may arise from making an emotional decision," said Ms. Parsons.
Ms. Parsons added that getting preapproved financing, choosing a fixed rate and stress-testing mortgage payments in advance of buying a home can provide peace of mind and help home buyers become mortgage-free sooner.
The BMO Psychology of House Hunting Survey was conducted by Pollara. Survey results cited in this report are from online interviews with a random sample of 2,000 Canadians 18 years of age and over, conducted between February 25 and March 5, 2013. As a guideline, a probability sample of this size would yield results accurate to ± 2.2 per cent, 19 times out of 20. Data has been weighted by region, gender, and age, based on the most recent Census figures, so that it is representative of all adult Canadians.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $538 billion as at January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.
Matthew Duffin, Toronto
Valerie Doucet, Montreal
Laurie Grant, Vancouver