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5 February 2014

Working with Millennial Homebuyers, Part 1

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In a recent piece in RISMedia’s Real Estate, Generation Next, Sherry Chris, president and CEO of Better Homes and Gardens Real Estate, explores the Millennial generation, and our findings on who they are, what they want, and what they’re looking for in a real estate agent.

In the first installment of this Clean Slate two-parter, we spoke to three recent Millennial homebuyers to learn firsthand, whether their real estate experiences match what we found in our Better Homes and Gardens Real Estate national survey of 18- to 35-year-olds. Our conversations echoed those findings.

They had good jobs, but they all scaled down their expectations to secure a mortgage. None wanted a cookie cutter house. They didn’t mind fixer-uppers. But each homebuyer’s experience reveals a different insight into what this generation looks for in a real estate agent.

Text Me, Maybe
Take the couple who bought a house on a lake in Morris County, New Jersey.

George is a 27-year-old medical student who didn’t qualify for a loan due to his low income. He’ll earn a high salary in a few years after he graduates, but he and Tina, his 28-year-old girlfriend, didn’t want to wait.

Luckily, Tina has a job as a marketing manager. She secured a loan to purchase the $220,000 house, a 1940s-era bungalow near an enormous reservoir that she intends to fix up for around $25,000.

She owns the house. But they share the bills, paying around $500 less a month in mortgage payments and taxes compared to their prior rent.

What did Tina and George like about their REALTOR®? His loyalty and tenacity.

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“He always tried to get me whatever he could from the seller,” said Tina. “He always had my back.”

Their REALTOR® communicated with Tina and George the way they wanted to be communicated with. They liked how he sent them text messages, e-mails and scanned PDF documents.

“He was very tech-savvy,” she said. “I didn’t have to get on the phone with him or fax things to him, which I loved.”

Seventh Time’s the Charm
Jess and her husband, Geoff — both 32 — also liked how their REALTOR ® was on their side. Both were concerned about agents trying to close a deal quickly to gain a commission.

“She never really made us feel like she was in a hurry,” said Jess. “She was never going to let us buy a house we weren’t happy with.”

Jess works for an international non-profit, traveling often to Bangladesh, India and Nepal, while Geoff is a nurse’s assistant. Despite their combined incomes, sellers were asking more than they could afford.

“We knew going into our house purchase that we wouldn’t be able to buy something state-of-the-art,” said Jess. “We knew upgrades were a must in the near future. We were looking forward to doing it ourselves.”

They put in seven — yes, seven — offers on properties over the course of eight months before they bought a single-family home in Durham, NC, for $180,000. Their agent was patient.

“There were times we wanted to quit,” said Jess. “Our REALTOR® always said, ‘It doesn’t hurt to spend ten minutes to go look.’”

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Sensitive to their needs and always sending them relevant industry information, their REALTOR® also helped them focus on affordability.

“Our REALTOR® was really good about staying on top of mortgage rates and what home prices were going for.”

Delayed in Manhattan
Even Craig, a well-paid 26-year-old advertising executive with enough cash for a down payment on a Manhattan condominium had to wait a year before he was approved for a loan.

Craig is a British citizen, so he lacked a credit history in the US.  Despite using a mortgage broker supplied by his employer, banks told him to come back in 12 months.

“The hardest thing was securing the mortgage,” he said. “It was this Catch-22 where I couldn’t get a loan, because I never had a loan.”

A year later, he met a REALTOR® whose tech capabilities won him over. “His website was incredible,” said Craig. “It had the functionality to look at apartments by price range, size, etc.”

The website sent Craig an alert when a condo appeared on the market that fit his needs. He jumped on the opportunity and, oddly, discovered it was the single-bedroom condo next door to the one he was renting in the same building near Gramercy Park. He bought it for $900,000.

“It seems to have happened by fate,” Craig said.

Stay tuned for the second installment of this article, as we focus on some of the pain points Millennials may experience during the first-time homebuying experience.

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