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The real estate market — and especially the luxury real estate market — has been a mixed bag for millennials. This generation has witnessed global economic turmoil, both as they were finishing school and as they were establishing themselves professionally in their 20s and 30s.
Of course, there are affluent individuals and families in this cohort who are in a position to purchase property. But like their peers, their perceptions have been shaped by their experiences, and many are entering the market for the first time later than their parents or grandparents.
Given these unique considerations, how can luxury agents help millennials take that first critical step in the journey of home ownership, and cultivate lifelong clients? It’s worth noting the hurdles this group of would-be buyers are facing, and the challenges agents experience when trying to assist them.
These buyers can be indecisive
“Millennials can be finicky, and often have a hard time making a decision when it comes to purchasing a luxury home versus a fixer-upper,” notes Louis A. Magnano II, Real Estate Associate at Sotheby’s International Realty – Los Feliz Brokerage.
This lack of clear direction is difficult for young buyers, who have seen enough economic downturns to shake their confidence in where and how they should be investing their money. But it’s also frustrating for luxury agents who spend time and resources supporting these prospects, only for them to leave for the lower end of the market.
On the other hand, millennials have been exposed to a huge amount of real estate and home improvement-related entertainment — and sometimes their wishlist is a little too detailed. “Luxury buyers may have very specific outlines of what they want, and it’s not always available,” says Tim Rangel, Real Estate Associate with Sotheby’s International Realty – Wine Country – Sonoma Brokerage.
These buyers can be uninformed
As any real estate professional knows, indecision means missed opportunities. This is something members of the millennial generation don’t always grasp until they’ve let several great properties get away.
“In the Sonoma-Napa region of California that I represent, millennial buyers typically have the challenge of competing with more experienced buyers, and that can make all the difference,” says Rangel. “Buyers with experience tend to execute more quickly, which has been required in the fast-paced, competitive market we’ve been in.”
These buyers can be risk-averse
Even if millennials know what they want, and they know they need to act, they have been conditioned by uncertainty — and as Magnano explains, their unwillingness to take a chance is holding them back.
“I’ve found that the millennial clients who want to make a serious power play are trending down,” he says. “The world is in such a historically turbulent time that I feel as though it’s mostly fear-driven, and buyers are wary of what’s coming next. Most have a lack of faith in this current market.”
So what’s the solution to help an indecisive, uninformed, and risk-averse millennial buyer conquer their apprehensions and close on their dream home? Magnano and Rangel offer three pieces of advice.
1. Relationships begin with relatability
For Magnano, marketing with the right tone on the right channels is fundamental. “If you’re a millennial in this day and age, you’re on Instagram looking at what people are doing and seeing on a daily basis,” he says.
Branding has been key for him in building his sphere of influence, engaging millennials with images that appeal to them aesthetically and stories that speak to them authentically. Social media is a must.
2. Help young buyers fill in the blanks
Millennial buyers are tech-savvy, and many start their home search with a DIY approach, turning to digital real estate platforms rather than agents. But as Rangel points out, that actually works to a luxury agent’s advantage.
“When a millennial buyer uses an app and then reaches out to me to get the scope, they quickly understand how vital it is to have a ‘boots on the ground’ expert,” he says. “Because this is a service industry, we deliver a real value add.”
Magnano agrees. “Tell them the truth,” he says. “If they want to have someone who has their best interests at heart and protections in place, they are going to want a solid real estate agent. I tell my clients that they are getting a level of service that’s unmatched, and make myself wholly available.”
Having knowledge, experience, strategies, and tools makes working with an agent attractive to millennials. “Again, people are scared and want to feel safe,” says Magnano. “I lead with love.”
3. Homes are viewed as investments
One thing is clear: these buyers don’t take home ownership lightly. And while that cautiousness can often work to their detriment, it also means those clients that manage to break into the market are serious about real estate and appreciative of their agents’ insights.
“My millennial clients that currently own properties are in it for the long haul, meaning if they want to sell, they are most likely leasing their places out or going elsewhere, then collecting passive income on rentals,” says Magnano. “With this group, it’s important to be as patient as possible. They need a ton of hand-holding, but if you can help them weather this historic storm, you’ll be in a great place.”
Rangel’s sentiment is the same. “Be patient, consistent, and look for unique ways to provide value,” he says. “Don’t just tell people how good you are — show them.”