To be successful as a real estate agent today, you have to be able to cater to myriad demographics, particularly millennials, the largest generational cohort since the Baby Boomers.
Reaching this block of buyers requires a different mindset.
Over the months, there have been a number of articles discussing the best ways for agents and mortgage professional reach the millennial market. Many of those have focused on utilizing technology and social media.
However, there isn’t a lot of specific messaging geared toward this growing market, which demonstrates the gap between millennials and the real estate industry as a whole.
Are millennials unrealistic in their expectations – in both thinking that the market will come to them when they’re ready or giving up the idea of homeownership altogether? Or, are real estate and mortgage professionals simply not approaching and talking to millennials in a way that makes sense to them?
According to a 2017 homebuyer Insights Report from Bank of America, millennials are ready to homes.
“If there’s one thing to take away from our report this year, it’s that forward-thinking millennials are buying homes – and they’re happy with their choice,” the report said. “This growing group of millennials is seeing the value of getting into a home. In fact, nearly 80 percent who bought homes report that homeownership has had a positive long-term impact on their financial picture. Clearly, the millennial generation is coming of age and realizing it might not make sense to wait anymore to purchase their first home.”
Millennials make up 42 percent of first-time homebuyers, the largest group of any generation. According to a report by Apartmentlist, 80 percent of millennials said they would like to buy a home one day, but just 55 percent think they can actually afford to buy one.
And a key question for agents to pinpoint is just what are millennials willing to give up to move into homeownership.
When working with millennials, can you convince them that paying off their car and not trading it in for a new one is the smart move if they want to buy a home? Possibly.
This assumes that they have a car they can pay off and not a lease, which is a greater possibility.
Further, it assumes that millennials will act in a way that is opposite their nature for the sake of becoming a homeowner.
“Younger buyers in particular are more likely to view cars as technology that needs to be continually upgraded,” Jessica Caldwell, executive director of strategic analytics at Edmunds.com told the Dallas Morning News.
This is where mortgage options come into play. So much of working with buyers today, and, especially millennials, is about being creative, which is why there are so many other loans out there worthy of investigation.
From FHA loans, which would allow millennials to put down just 3.5 percent with more lenient credit scores than many conventional loans, there also are Fannie and Freddie loans out there that require just 3 percent down.
Specially branded mortgages with a minimum of 3 percent down also are attractive. Special deals also are drawing in millennials.
Chase’s DreaMaker mortgage is directed at low-to-moderate income buyers, as well as those with less-than-perfect credit.
Lennar also just introduced a new loan program through its subsidiary called the Eagle Home Mortgage’s Student Loan Debt Mortgage Program in which borrowers “can direct up to 3 percent of the purchase price to pay their student loans when they buy a new home from Lennar,” according to the builder’s news release. That could mean getting rid of $13,000 in student loans.
For agents working with millennials, that can be an attractive option to be able to discuss.