Do Millennials, or first-time homebuyers for that matter, want to use a real estate agent? The majority do, but it's a pretty close call.
This seems to be a reoccurring debate in the market as firms like Zillow (Z) or Redfin start to offer a lot more options in online shopping.
Digital Risk recently conducted a housing survey on Millennials in the housing market, surveying 1,344 Millennials who are between the ages of 18 and 34, distributed nationally by their age, gender and census geography.
The survey asked three telling questions about the role of real estate agents:
- Where did you find the home you most recently purchased?
- Would you prefer to search for a home through a real estate agent or on your own?
- What resources did you find most helpful in your home search?
This first set of charts includes all the responses from Millennials.
Click to enlarge
This second set of charts breaks out respondents who are interested in purchasing a home within the next five years.
Sources: (Digital Risk)
Although the helpfulness and benefit of a real estate agent still wins the majority of these buyers, the gap is narrow.
This article from Yahoo News does a good job explaining the important factors in choosing an agent and lists nine red flags to watch for when choosing one.
Here is just one example of what to watch for: The agent doesn’t know the real estate landscape in your neighborhood.
Finding a neighborhood expert is especially important in areas where moving a block can raise or lower the value of a home by $100,000. An agent who specializes in a neighborhood may also be in touch with buyers who are looking for a home just like yours or sellers who haven't put their home on the market yet.
As for why Millennials might not want to use a real estate agent, I think there are cases where it just isn't necessary.
Before I go on, let me say that I have not purchased a home before, and despite reporting on the housing market daily, there is still a lot I have to learn. I do welcome your advice in the comments. However, I do fit into this survey’s requirements of someone being between the ages of 18 and 34 who wants to buy a home in the next five years.
Right now, it's a seller’s market in my area and having an agent could make the difference in landing a house or not, especially if they have connections. But what if it was a buyer’s market or I didn't live in a hot housing metro? Depending on the situation, there is a lot to be gleaned from the Internet. And given the status of the market and my situation, it could persuade someone to not use an agent.
There are a lot of real estate agents who know what they are talking about and have been in business awhile. I simply want to present some reasons for why I see Millennials veering away from that choice.
Look at the facts: We love technology. Approximately 94% of Millennials are active users of online banking, 72% are active users of mobile banking and 92% are active users of social media, an Accenture's report on the “Digital Disruption in Banking" revealed.
Millennials are changing the face of housing because of what they want and expect.