As a generation, Millennials are also called many things — environmentalists, urbanites and debt-strapped, to name a few. And when it comes to homebuying, Millennials are often depicted as an elusive sale, a lost generation, the faltering arm of a robust economic sector.
A myriad of studies, blog posts and articles surrounding Millennial home shopping habits identifies an industrious desire to pin this generation firmly under our sales-oriented thumbs. But perhaps we’re going about this wrong, says Maura Neill, a RE/MAX Realtor in the Atlanta, Ga., area.
“I think there has been a big push to categorize buyers and sellers by generation and to generalize their traits, personalities and preferences,” says Neill, adding that this can be risky for agents. “We need to remember that the individual is the most important, first and foremost.”
While studies may provide you with a frame of reference for Millennials clients, if you’re not really listening and engaging with each client on a unique basis, then you’re not going to be successful, she says.
New Versus Resale
“Many Millennials, like any buyer, have questions about the differences between buying a new home and buying resale,” says Neill. The first step in any home sale is to arrange a buyer consultation to explore these differences.
Compared to a resale transaction, “new build has an initial appearance of being complex and risky,” says Ryan Donovan, a Realtor in Colchester, Vt. And while most clients usually opt to see a selection of both new and resale homes, Donovan — himself a Millennial — believes that buyers need a thorough understanding of the homebuilding process to consider newly built homes as a serious option.
Aside from the building process, however, the biggest difference when it comes to newly built homes is that in most cases, there is little to no negotiation on price. “Negotiation is more likely to occur in the form of additional upgrades or features for the homes,” says Neill.
Generally speaking, Millennial buyers are seeking out similar features in a home. Their desires include such things as more energy-efficient homes, close proximity to social activities and work and walkability or easy access to public transit, says Neill.
Donovan agrees, adding, “As a whole, Millennials are much more interested in a smaller, well-built home with thoughtful details than a sprawling McMansion.” For example, they’re seeking the simple functionality of a room with an appropriate number of outlets to accommodate today’s gadgets.
The good news is that most new homes already come equipped with the features these buyers are looking for. Research shows that homes today are up to 30 percent more energy efficient than homes built just 10 years ago. Better building materials and insulation, smarter energy and water-saving appliances and even solar panels are all contributing to this trend.
Typically built in new-home communities, today’s new homes also provide a wealth of social activity in one’s own neighborhoods. Hike and bike trails, community pools, clubhouses and even cultural arts centers are just some of the amenities that today’s new-home communities are offering.
Walkability and transit-oriented developments are also becoming increasingly popular in modern residential construction. Building in already walkable environments like dense cities is made possible through infill building, condo and townhome construction. Additionally, with the increasing importance of walkability scores, many suburban communities are also making an effort to provide residents with retail and entertainment centers within walking distance. The increasing importance of public transportation leads many builders to build along high-profile transit lines and make use of bike lanes as well.
The Millennial Challenge
While Millennial life circumstances are vastly different, there are certain problems these consumers encounter regularly. The first, and most common problem, is large amounts of college debt that can greatly impede their ability to get financing for a new home. This is especially true when considering the still-strict financing regulations and debt-to-income requirements of most lenders, says Neill.
Another issue is lack of credit. “Many Millennials are so wary of debt — especially if they already have some school loans — that they do not use credit cards, unaware of the fact that they need some credit to qualify,” says Neill.
To get around these issues, Neill says it’s important to coordinate an effort between prospective buyers and lenders. This way, buyers can build up their credit in a healthy way to become more qualified for such a major purchase.
Working With Millennials
Growing up in an age of unprecedented technological advancement, Millennials tend to take advantage of the Internet as a source of information more than other buyers, says Neill. But for all of its wisdom, there’s also a lot of false information available on the web. For real estate agents, this establishes the need to promote factual information via your own online presence.
Compared to other types of buyers, Millennials also “tend to do a lot of online research on topics other than just comparable sales,” says Neill. So, making sure you are providing this kind of additional, relevant information on your own website is an important marketing strategy.
Another important thing to consider when it comes to Millennials is the question of how they want to be contacted. While it’s important to ask each client what’s best, and respond accordingly, there are many Millennial clients who prefer texting. Despite its informal and somewhat limited nature, real estate agents need to be comfortable with this type of communication when appropriate.
Millennials aren’t an elusive sale or a lost generation; in fact, they’re hardly a uniform group. By understanding Millennials on an individual level, your chance of making a home sale increases exponentially. By investing the time in this burgeoning group of homebuyers now, you will secure your success as a real estate agent in years to come.