LendingTree found 1 in 5 buyers walked out over cameras, and it's costing brokers deals in a tough market
Affordability challenges and elevated mortgage rates are keeping the homebuying market stuck in neutral.
New data out from both the National Association of Realtors and First American on Tuesday showed July existing home sales continuing to slump.
At a time when buyers are pulling back from the market, another seller tactic could be to keep brokers from closing deals for their clients.
A new LendingTree survey showed nearly 3 out of 4 recent homebuyers noticed cameras or recording devices during a home showing, and 1 in 5 left because of them. While the number of sellers recording during a showing shouldn’t surprise buyers, considering most people have smartphones with them everywhere, this survey shows it does put off some buyers.
The survey showed that surveillance during home showings has become routine and that buyer discomfort is affecting deals. Among recent buyers, 19% said they left a showing because of recording devices, 18% said they decided not to make an offer, and 34% said knowing recording equipment was used would make them less likely to submit one.
A veteran analyst said the findings are particularly relevant in a market where affordability pressures are already making buyers more selective and more easily spooked by anything that feels off.
Matt Schulz (pictured top), chief consumer finance analyst at LendingTree, said buyers going into showings right now are carrying more stress than usual, and that changes how they react.
"With houses being as unaffordable as they are, people may be a little less willing to overlook things that they don't like," Schulz told Mortgage Professional America. "If something kind of puts them off, then you could see them just potentially saying, ‘Yeah, no, it's just not worth it. I'm going to go back and rent for a while.’"
Concerns about surveillance
The survey found that recording devices are changing buyer behavior well before anyone walks out. Among the 64% of recent buyers who were concerned about being recorded, more than 1 in 5 altered how they acted inside the home.
Among recent concerned buyers, 22% avoided discussing their budget or offer strategy, 22% hid their excitement about a home, and 21% avoided saying what they disliked. Each of those changes can affect how a broker advises a client after the showing.
The data from sellers adds another layer. Among the recent sellers surveyed who had recording devices active during showings, 82% reviewed the recordings afterward, and 45% said what they saw influenced their negotiations, 43% said it affected repairs or staging, and 35% said it influenced pricing.
Schulz said sellers who keep recording devices active should understand the risk they are taking with their buyer pool.
"If there are things that you do that have a good chance of turning off a significant portion of your potential buyer base, then maybe you need to think about what you're doing," he said. "You just don't know what is going to be a deal breaker for people. For some, it could be wall color. For some, it's a camera being visible at a home tour."
Advising your buyers
Schulz said the practical advice for brokers is to prepare buyers before the showing, not after something awkward happens.
"Assume you're on camera the moment you walk through the front door," he said. "Whether you like it or not, that's the safest assumption. With that in mind, it makes sense to wait until after you've left the property to have any conversations that you wouldn't want heard by the seller. You don't want to accidentally weaken your negotiating position."
He said the conversation a broker has with a client before a showing can make the difference between a calm, focused tour and an emotionally reactive one.
"It may be incumbent on the broker to communicate that fact," he said. "If the client ultimately is like, no, the vibe is off, I just don't like it — fine. But at least you've had that conversation and made sure that they are making a more informed and calculated decision and a little less emotionally reactive."
For brokers advising buyers, Schulz said they should remind buyers that if the house they’re looking at is the right one, they shouldn’t let surveillance change their minds on buying it.
"Yes, having cameras present can make things a little awkward or weird," he said. "However, in most cases, that discomfort probably shouldn't be the deciding factor in a buying decision. At the end of the day, surveillance is temporary, but the right house could be with you for decades."
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