This post is provided by Satinder Haer, who writes about home improvement, design, and real estate for Zillow.
The millennial generation is characterized by their deviation from the traditions and patterns of generations before them. It should come as no surprise that as millennial become first-time home buyers, their home buying process is different, too. As a real estate agent, you may have to deviate from the tried-and-true methods that led to successful sales with older generations. The first-time buyers of today require a new approach that takes into account their preferences and shopping habits.
Are millennials buying homes?
Contrary to popular belief, even though first-time buyer demand has been weak, millennials are eager to buy homes. When asked, 12.1 percent of the general population indicated they’d like to buy homes this year compared to 12.9 percent of just millennials. The misconception that millennials don’t want to be homeowners may arise from the fact that millennials are delaying home purchases until later in life.
In the 1980s, a first-time buyer was more likely to be married, 30 years old and renting for just 4 years. Today, a typical first-time buyer is 33 years old, only 40 percent likely to be married and renting for 6 years. Millennials are hungry for homes but given their (largely) single lifestyles, they may not be seeking traditional single-family starter homes like first-time buyers in the ‘80s. If you want to sell effectively to first-time buyers, take the time to understand their lifestyles and priorities up front, then use that information to help guide their search.
Does rising student debt make it harder for millennials to buy homes?
Another important thing to take into account is your first-time buyer’s financial background. Student debt plays a bigger role in home ownership for current first-time buyers than other generations, because many millennials carry a high student debt burden. While student debt actually has a negligible impact on the probability of home ownership, it can impact buyers’ debt-to-income ratios (DTI) and credit scores. In turn, those factors can impact their ability to secure lender approval. When working with first-time buyers, explain that DTI and credit score can enhance or hinder their ability to acquire a mortgage. Your buyers might not be aware of all the factors that lenders take into consideration for home loans.
There are many lending programs for first time home buyers and owner occupants. Make sure you are familiar with low down payment options for buyers and down payment assistance programs that may be available in your area.
What is the best way to market to first time home buyers?
In order to reach the first-time buyers of this decade, you have to be tapped into their social media-dominated lives. Millennials are more likely to reach for their smart phone or laptop when they want to search for homes than call a local real estate agent. Incorporate technology and social media marketing into your real estate business so that first-time buyers beginning their home searches online can find you when they’re ready to look at homes. Plenty of low-cost online resources, like social media sites, can help you develop an online business presence and find leads that you may otherwise miss.
Today’s first-time buyers want information at their fingertips. Learn how to conduct virtual home tours, research the neighborhoods in your market to highlight social scenes and obtain great reviews online to gain a competitive edge over agents who don’t make use of the latest tech tools.
When do first time home buyers look for houses?
It’s not too late to revamp your selling strategy and capture first-time buyers. While families with children tend to move during the summer and settle down before the school year begins, millennials conduct their home searches once the competition from timeline-bound shoppers dies down. First-time buyers are out there right now and using technology to guide their search. Communicate with these buyers using the channels they prioritize and show them homes that appeal to their lifestyles.
Marketing to first time home buyers is a great way to get started selling as a real estate agent. Facebook, Twitter, Instagram, Pintrest are all social media sites that reach the younger generation. As an agent marketing to any generation you should have a great website that shows your expertise. In today’s technology driven world people love to “Google” anyone they know to see the good and bad that pops up.