There seems to be an emerging emphasis on shopping that has taken the activity to new extremes, almost giving it the feel of a competition. People are constantly attempting to showcase their knack for the biggest and best sales. Never is this more evident than the phenomenon that has become of Black Friday and Cyber Monday.
However, a new study has emerged that suggests this new generation of extreme shoppers don’t apply the same diehard tactics to everything they buy. The people who camp outside in front of shops for days, vulture coupons as if they were winning lotto tickets, and self-induce carpool tunnel syndrome scavenging the web, apparently may be the same people being referred to as the least savvy homebuyers.
A recent poll taken of Black Friday and Cyber Monday shoppers reported that nine out of every ten people cited the appeal of competitive specials and sales as reason for partaking. That same figure of people reported to have compared similar products between brands and stores for pricing prior to purchasing an item. It also suggested that an overwhelming majority of shoppers who turned out for the deals were low to medium income earners.
These people may do staggeringly less research and comparison prior to purchasing a
home.
This poll comes on the heels of an unrelated report on mortgage purchasing by Fannie Mae Chief Economist Doug Duncan, who reported that fewer people shop around prior to obtaining a mortgage and it typically costs them thousands of dollars in closing costs and interest rates.
"Homeowners who don't obtain multiple mortgage offers or carefully compare rates are essentially leaving money on the table, particularly given today's unprecedentedly low interest rates," said Duncan. "Although a home purchase is the largest financial obligation most people will ever make, many borrowers do not fully understand their mortgage products and costs. As a result, some homeowners in this position may find themselves with unsustainable payments down the road."
The report compared the due diligence between classes of income earners, and revealed that low to medium income earners performed 20% less research prior to obtaining a mortgage than medium to high income earners. An additional 43% of the lower income earners also reported not understanding their mortgage rate. Another 10% of the lower income earners reported paying more than expected in closing costs than higher income earners.
While mortgage rates and contracts are naturally more complicated than television discounts and buy-one-get-one sales, they can be easily explained by professionals probably in less time than it takes to wait in the lines at the mall during Black Friday sales.
The deals afforded by current record low mortgage rates are also enough to have even the stiffest of extreme shoppers excited. So the next time you plan on camping out overnight in front of the local Best Buy, maybe consider taking the opportunity to call a few local mortgage professionals and ask about current refinance and purchasing opportunities while you wait. You just may find that you’ve been missing out on deals that will save you way more than Black Friday ever could.
