One of the most important niches in the real estate market today are the Generation Y homebuyers, otherwise known as Millennials. Roughly defined as those born between 1980 and 1994, this group of over 71 million citizens is now 25-39 years old and represent most of the first and second time homebuyers in the US market. If you want to help your team of real estate agents find success by specializing in this often misunderstood niche, you must first know what is driving the decisions of the Gen Y homebuyer. Here are some of the biggest challenges facing this unique and increasingly dominant segment of the home buying population.
Overcome Fears of Another Recession
Although the economy has recovered and time has healed many wounds, many members of Gen Y are still scared about buying real estate because of the trauma caused by the Great Recession. In fact, many are fairly convinced that there will be another one and that they will become victim to it. The best way to address this challenge is to meet these nervous buyers with empathy and education and bring along good partners to help them finance their dreams. As with many fears, people still don’t understand what actually caused the Recession, why people lost their homes, and what market conditions to look out for. It is your job to educate them and help them buy with confidence by supplying them with all the information necessary to make a good purchasing decision.
After recovering from the financial blows of the recession many members of Gen Y feel strongly that they deserve more out of a home than previous generations. Therefore, many of them are attracted to new construction or more recently built homes with convenient features. Furthermore, since most people of this generation are primarily focused on their career, they tend to want a home that will need minimal maintenance, so condos or properties with an H.O.A. are considered desirable.
While these are reasonable priorities, it is important to be clear and honest about what your clients will actually be able to afford. Many carry onerous education loans and other expenses that were not a factor for Gen X and Baby-Boomers. Similar to a conversation that you might have with a first-time homebuyer, you should sit down with them for a Buyer’s Consultation to review their goals and explain what types of properties, amenities, and neighborhoods are realistic for their budget and comfort level. Do this right and you will have fewer misunderstandings and a referral source for a long time.
Plan for Long Term
One of the biggest challenges of the Gen Y homebuyer is that they often need to house themselves, their children, a sibling or two, and their aging parents. Often this is the only way they can afford their home purchase. This means that they will be heavily reliant upon their agent to help find a home that will support their multigenerational lifestyle. For example, if they want a multi-story home, the agent may encourage them to purchase a property that will have at least one bed and bath on the first level because it will be safer for aging parents and afford everyone a measure of privacy. This information is important to extract in initial conversations and shows that you have a deep understanding of where they are in their life. It all makes helping them more satisfying and more rewarding.
Real Estate Financing And Low Rates
According to NAR, 97% of Generation Y homebuyers financed the majority of their home purchase versus the 88% national average, so getting a competitive loan is a primary concern. Therefore, it is very important that you have a strong network of lenders that will be able to provide your clients with the most competitive rates based on their circumstances, so they don’t get cold feet. It is also your responsibility to help them understand the value of locking in their rate at the right time and generally providing encouragement that makes them trust they’ve made the right decision, even after they’ve made it.
Build Valuable Connections with a Valuable Generation
Every generation faces its own challenges, and this population’s biggest challenge in real estate revolves around fear and mistrust of traditional outreach and impersonal sales approaches. If you want your team to be successful with Gen Y buyers, it’s important that they are genuine, work to earn their clients’ trust, and then work to keep it by understanding their clients’ unique needs and concerns by being an expert sounding board.
And it doesn’t hurt to have a large infrastructure of tools to effectively work with clients and help them keep in touch with their personal contacts with outreach that is easy, personal, and powerful.
At Weichert, we believe in the power of the personal. Our selling systems and tools are based on building relationships and having real interactions with people. If that’s how you like doing business contact us today to see how you can plug into our systems and how we can help you grow your business.