Every generation has faced defining economic events that alter their collective perspective. The Greatest Generation was shaped by the Great Depression, Baby Boomers were impacted by the oil crisis throughout the 70s and Millennials experienced their coming of age moment during the largest housing market downturn in American History.
The housing market coupled with the ubiquitous availability of real estate and market information online, has created a new era of homebuyers in Millennials.
While Millennials have gotten a bad rap -- often defined by negative attributes, such as laziness, entitlement, and unreliability, recent data from Zillow certainly contradicts these Millennial qualities -- specifically when it comes to home buying.
Let’s explore some of the important characteristics of millennial home buyers.
1. It is not the ME generation
According to a Better Homes and Gardens Real estate survey, 71% understand that home ownership is not deserved, but rather, earned. In order to obtain a home, Millennials are willing to make lifestyle changes such as eating out less, working another job or even move back in with their parents. Millennials also believe that the housing downturn has made them more knowledgeable about homeownership than their parents at their age -- researching home prices, interest rates and ability to secure financing.
Millennials want to make sure they are ready to own a home. However, there is still a general fear about the financial skills needed to buy a home. New, national data from Sente Mortgage shows that only 56% of Millennials have the financial education needed to purchase a home. Meaning, this generation will be looking to real estate professionals to guide them and help in their home buying journey.
2. The fix it generation
One in 3 would prefer a fixer upper house with minimal repairs. Not only do Millennials want something unique, they want to live in a specific area, but might not be able to afford it, making a fixer upper a perfect solution. Millennials take a pragmatic approach to home buying, with 98% agreeing that making sure the home was a smart, long-term financial decision and within budget (95%) was more important than loving the house. This requires specific lending products and expert knowledge from real estate professionals and lenders.
3. Their home needs to be smart
For most, technology is more important than curb appeal. Technology is an absolute essential - such as energy efficient appliances, windows and materials, a security system, and a smart thermostat.
More Millennials are taking the home-buying plunge, especially in the last year, as the average median household increased, unemployment rates decreased, and the housing market began to recover. And while the home-buying journey is exciting, beginning and navigating the process can be very stressful for first-timers. In fact, data shows that 44% of homebuyers find the process to be intimidating, giving real estate professionals a key role in the buying process.
So, what is the Millennial home buyer looking for during the real estate process?
4. Expert advice and skill
Millennials were raised with smart phones in their hands and seek a blend between online information and an offline experience. They will come to the table armed with market data they have found online, but also seek an expert who knows the market intricacies of certain geographic areas.
How can you be sure that you can offer value that is not available on the internet? Focus on a niche market and use hyper local marketing. Millennials want an agent who is innovative, agile and flexible. It is up to the real estate professional to help them envision how a house can fit their needs, and present a strong negotiating strategy when needed.
5. Customization and a unique experience
In a world full of content that is personalized based on viewing habits and RSS feeds, millennials will look for a customized experience. It is important to ask questions such as, how would you like me to communicate with you? How often would you like to be communicated with? This will help you provide a personalized and customized experience that will take care of buyer’s specific needs, while also helping them feel understood and appreciated.
6. Ratings and reviews
Consumers expect to be able to talk with others about their experiences online. While research shows that reviews on a site can boost traffic by as much as 20%, interestingly, Millennials don’t like testimonials. Why? Testimonials are contrived and often more marketing than reality. Millennials want complete transparency. If you don’t have a system for gathering consistent ratings and reviews, quickly put in place a strategy to demonstrate that you embrace transparency. RealSatisfied is a great tool to consider for ratings and reviews.
While information is available online, thorough, and consistent, explanation of the home buying and selling process may not be as readily available. At the first appointment, take them through a step-by-step explanation about the home buying and selling process. Educate them on what will happen at each part of the process and what unique value you will offer during each step. This provides an opportunity for you to not only educate, but demonstrate your expertise, resulting in increased trust and a better relationship with your clients.
As a new generation enters the market, expert guidance from established professionals is what will set a great buying experience apart. Not only will understanding the style preferences of Millennials help new buyers feel more comfortable, but it will help establish a solid relationship in the future, leading to new referrals, and a long-term relationships.