Millennials are now in the heyday of their first home-buying years. And Generation Z is right on their heels.
Both demographics are huge in number. Millennials — roughly those born between 1980 and 1996 — represent about 27.5% of the population in Canada and almost 25% in the U.S.
Generation Z — roughly those born between 1995 and 2011 — make up about 17.6 % of the Canadian population and about 27% of the American population.
What do all these numbers boil down to?
A lot of first-time buyers you could be working with.
Helping first-timers make their first purchase is a much different game than working with a second-, third- or eighth-time buyer. It requires a different approach.
Here are the six best strategies for successfully working with first-time buyers.
1. Adjust Your Marketing Efforts
If you want to attract first-time buyers, you’ll need to tailor your marketing efforts accordingly.
First, switch up your voice and tone. You want to sound approachable, down-to-earth and relatable. That means leaving out the real estate jargon, relaxing your style and letting your personality shine through. It does not mean trying to use slang you’d never otherwise use; that’s transparent and awkward.
Then, go where your target market is. Millennials (and soon, Gen Z-ers) probably aren’t going to look at your real estate postcard before they chuck it in the trash. They’re not hanging out on Facebook anymore and they’ll probably only sign up for your newsletter if there’s a contest to be won.
2. Know What’s Important To Them
First-time buyers have much different needs than an experienced client. Having a deep understanding of what they value and what they need, and how that sets them apart, is key to a successful working relationship.
Budget. For most (but not all) first-time buyers, meeting a budget is the biggest priority in their search for a home. There’s a high probability that their maximum price isn’t very high and that there is almost no wiggle room within their budget. Real estate agents need to understand and respect this, without making their client feel any sort of discomfort.
Turn-key. A limited budget means that first-time buyers probably don’t have any cash to fund renovation projects. The properties you show them will need to be immediately livable — no fixer uppers.
Location. Location is, of course, top of mind for every buyer. But for first-timers, location may be a factor they won’t compromise on. Maybe they want to be able to continue their lifestyle in the area they currently live in. Maybe they have a burgeoning career and can’t risk a long commute.
3. Understand Their Unique Pain Points
Just like their needs, real estate newbies have unique pain points, too. The biggest, of which, is affordability.
First-time buyers are typically young — hence our aforementioned points about millennials and Gen Z — and young people typically don’t have much in the bank. They might also be carrying education debt.
There’s also the issue of mortgage rules. In Canada, the stress test that’s been in effect since January 2018 has impacted the ability of many would-be buyers to actually purchase a home. This mostly affects buyers with lower household incomes.
Another common pain point for first-timers: size. These buyers may be thinking about starting families and would love a home that can accommodate the addition of one or more little ones. In many markets, and at a limited budget, this can be difficult to achieve.
Being understanding of and compassionate towards these unique pain points can go a long way in providing first-time buyers with a positive, referral-worthy experience.
4. Respectfully Manage Expectations
Despite their typically smaller budget, many first-time buyers will have unrealistic ideas about what they can afford. Who can blame them? They’re excited about their first home.
That being said, it’s your job to manage out-of-touch ideas about what they can afford. Like when your client insists it’s stainless steel appliances or nothing, or when they turn their noses up at house number 10 because it doesn’t have the modern farmhouse vibe they’re looking for.
If you don’t manage their expectations from the get-go, you risk a long and drawn-out home search that leaves both you and your client frustrated. On the other hand, if you extinguish their Pinterest home dreams too forcefully, you risk losing your client completely.
Work with your client from the very beginning to establish a list of wants and needs. Give them your opinion on what’s possible (using real data and existing listings as evidence) and promise them that you’ll do everything in your power to strike the best balance between those wants and needs.
As you go through the viewing process together, always have this list in mind. When you’re walking through homes, be honest about how they fulfill or don’t fulfill your client’s lists, and offer suggestions on tweaks they could make upon moving in.
You don’t have to work miracles. The goal is to be respectful, understanding and helpful, and make your client feel as though you “get” them and are doing everything to help them.
5. Communicate The Right Way
If you want to gain the confidence of your first-time buyers, get on their level.
Generally speaking, millennials don’t like to chat on the phone. Don’t rely on phone calls as your main form of communication. Text them instead. Or, send them a message on Instagram, or an email.
Know that they’ll likely be opening emails and links on their smartphones, rather than their laptops or desktops; make sure you’re sending mobile-friendly content.
Millennials are also the kings of self-education. For instance, they’re more likely to read an online tutorial than to immediately call someone for help. In that spirit, send them third-party content to read when you want them to understand something about the real estate process.
6. Position Yourself As A Friend And Mentor
Millennials get a bad rap from older generations. The last thing they want from their first real estate experience is someone older preaching to them, accusing them of spending too much and saving too little and telling them that this is just how things are.
Don’t be that person.
Instead, strive to take on the role of friend and trusted advisor. Advise, don’t command. Sympathize, don’t judge. Listen, don’t assume.
Building a healthy, happy relationship with first-timer buyers may take a little more patience and effort on your part, but it’s worth it to know how to successfully work with this niche.