In my experience, the number one reason first-time homebuyers are reluctant to pull the trigger and purchase their first home is that the process is overwhelming and scary to them. Taking time to explain the entire process from start to finish eases their anxiety and can be the beginning of a relationship with a lifetime client.
Although it’s true that many millennial first-time homebuyers do not qualify for a loan because they are carrying a large amount of student loan debt, many are not. These millennials are anxious to buy their own home and begin creating their personal wealth.
This generation faces obstacles the boomers and generation X did not face. They must create their retirement plans through saving and smart investments. Many look to real estate to begin building wealth that will allow them to retire someday.
Here are some suggestions for working with a first-time and millennial homebuyer.
Explain the terminology
As agents, we’re used to throwing out terminology and often assume the other party understands what we are talking about.
Most first-time homebuyers have no idea what the terminology means. When we ask, “How much will you be depositing as an EMD?” they have no clue what we’re talking about, and sometimes they are afraid to ask. Try and refrain from real estate jargon and acronyms as much as possible.
Go over every step of the homebuying process in detail
Create an infographic or brochure that goes over every step in detail. Better yet, create a fun video that explains or acts out the entire process. And, I mean every aspect. Go through the prequalification process, home search guidelines, and finally, the homebuying process from contract to close. The simpler, the better.
Prequalification with a patient lender
Try and match your buyer with a patient lender. Someone who won’t be annoyed explaining things more than once. And, someone willing to kick ankles to get docs back in a timely manner when necessary.
This group of buyers tends to procrastinate. Not because they are lazy, but because they are overwhelmed. A lender that has a nurturing personality tends to be able to ease their concerns and keep them on track.
Help them understand what type of purchase will help them reach their next goal
Many first-time homebuyers are young and are not looking for their forever home. Either they are looking for a property that will be an investment property down the road, or a smaller home now that can be sold later to step up into another home.
Because these buyers have an excellent probability for repeat business, advising them now on their best options can result in multiple purchases down the road.
Have a conversation about needs vs. wants
A need is something the home must have for it to meet the requirements of the buyer. If a buyer must have three bedrooms to accommodate their family or a large backyard for their dogs, then it should be listed as a need. A want is usually something they can add at a later date and is not a necessity. For example, a buyer may want granite and stainless steel, but that is not a need. Encouraging your buyer to forego their “wants” now and instead save for these upgrades after they move into their home will help get them in a house faster so they can begin building equity.
Not every first-time homebuyer is young
Keep in mind that keeping it simple and over-explaining the process is a good idea for most buyers. Even buyers that have multiple transactions under their belt don’t buy and sell every day. They need to be re-familiarized with the process. Especially since the process and requirements change so often.
Working with a first-time homebuyer can be one of the most rewarding things a real estate agent does. Yes, they can be a lot of work, but to experience the excitement with them as they take steps to become a homeowner makes it more than worthwhile.
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