A new generation of homebuyers
As the millennial generation, also known as Generation Y, takes a greater role in the housing market, young people’s preferences are starting to shape the way real estate business is done. The real estate portal Zillow predicts that millennials will overtake baby boomers as the generation purchasing the largest number of homes this year, making their preferences even more important. Here's a look at 10 ways millennials are changing the homebuying process.
Don’t call us, and we won’t call you.
For decades, the telephone has been the real estate agent’s tool of the trade. But younger homebuyers don’t want to talk. They want texts – and some prefer email. Dealing with these tech-savvy buyers has posed a challenge for the nation’s real estate agents, who are considerably older than the homebuying population they serve. A National Association of Realtors survey of its members in 2012 found that only 3 percent of agents were under 30 and 81 percent were older than 45, with 25 percent over 65.
We've done our homework.
More than 50 percent of millennials search for homes on their phones and, among those, 26 percent end up buying a home they found that way, according to the NAR. “With millennials, we do not control information,” says Player Murray, managing broker at Berkshire Hathaway HomeServices York Simpson Underwood Realty in Raleigh, North Carolina. “What they need is for us to interpret the information.”
We don't like surprises.
Younger buyers want to know what to expect and when. “I see them wanting to understand what’s going on at any time in the process more than any other generation,” says Paul Reid, a Redfin agent in Southern California’s Inland Empire region.
They also like timelines, checklists and charts. “If they don’t know what’s coming around the corner, it could cause paralysis when they get there,” says Murray, who's also a member of Berkshire Hathaway HomeServices’ REthink Council, a group of 15 young agents nationwide formed to help the company meet the needs of younger customers and recruit young agents.
We want customer service, and we want it now.
Millennials expect to be partners in the home search, and they want quick answers to questions. “They want information, and they want valid information, and they want it right now,” Reid says. “They’re the generation of Google at your fingertips.”
Is there an app for that?
Younger buyers live on their smartphones and use them as a key tool in their home searches. Apps are often their preferred method to check listings and collect other information. Redfin is an example of a company that's incorporating apps and other tech tools into its services. Customers can ask for home tours online or via the company’s app, as well as sign up for alerts about new listings and use their phones to search for open houses. The Redfin Deal Room lets customers keep tabs on the process of their transactions 24/7.
What did your other clients think?
Many millennial homebuyers get recommendations on agents from their parents, but they also do some research online before they ever call an agent. They want to see testimonials on an agent’s website, as well as read online reviews.
You call that social media?
As far as millennials are concerned, a Facebook page with listings is something their grandmother would do. They expect agents to engage them on social media. “They need to feel like they’re a part of your business,” Murray says. “Just reposting an article that’s been posted 1,000 times across the country isn’t enough.”
Tell us what data you want, and we’ll text it right over.
Unlike older buyers, young people are not bothered by being asked for bank statements, employment verifications or other personal data required for mortgage approvals. “The younger people are used to having to supply everything about who they are,” says Don Frommeyer, chief executive officer of the National Association of Mortgage Professionals and a mortgage broker in Indianapolis. “They’ll give you everything.”
No stainless steel appliances? Reject.
Younger buyers sometimes have trouble seeing the bones of a home and often don’t know which features can be changed easily at a minimal cost. That’s an area where they value guidance from agents. If they’re buying a home that needs work, they also value referrals to contractors and vendors. “You’ve got to be able to provide resources to them,” Murray says.
Yes, we can afford that.
Finding a home they can afford in the location they want is a challenge for many younger buyers, especially in cities, says Nela Richardson, chief economist for Redfin. Some are embracing the sharing culture by seeking homes with rental units or rooms that can be rented out on Airbnb or other services. “I think we’re going to see millennials solve that problem in a different way,” Richardson says.