Getting to Know the Next Generation of Luxury Home Buyers
Millennial buyers have taken the real estate market by storm. As of 2015, millennials (those born from 1982 to 2004) have surpassed baby boomers for the first time ever. What does this mean for you as an agent? It’s time to tailor your marketing strategy to align with this new era of luxury buyers and sellers. This will help you communicate more effectively with clients in this age range by embracing the differences in their communication styles and priorities when looking for an agent.
Millennials Are the New Generation of Luxury Real Estate Buyers
- 90% of millennials use a real estate agent. Yet, they may be harder to please compared to other generations.
- 63% of millennial home sellers would use their agent again, or refer the same agent to another. These are the lowest percentages of any generations surveyed.
- 70% of millennial home buyers would hire their agent again, or refer them to another.
- 45% to 50% of millennials originally found their real estate agent through a friend or family member.
- Partly due to outstanding or delinquent student loan and credit card debt, the average millennial credit score is 625 (per NerdWallet). As such, they are more likely to qualify under more flexible FHA-insured home mortgage loans.
- Millennials are more into social media and texting than any generation ever. Yet, 75% of millennials polled also like to be contacted by telephone calls.
- Millennials love the internet for communicating and finding real estate opportunities. Upwards of 94% of millennials use online websites for home searches. 51% of millennials later found the home they eventually purchased online first.
- Millennials do love their high-tech gadgets, but still rely on the wisdom of real estate agents, as noted by 87% of them eventually going to agents for assistance.
- Millennials now make up 32% of all home buyers nationally, which is the largest proportion of any generation. The Gen X homebuyers make up 27% of buyers. Younger Baby Boomers are reported at 16% of buyers, and older Baby Boomers account for 15% (31% combined).
With the help of agent Teri Barton, CEO KW Agent and Owner of the Compass Real Estate Team in Pasadena, California, we’ve compiled some advice on how to better understand and build relationships with this growing demographic of new buyers.
How Millennials View Agent Relationships
Today’s millennials do their research online. When they want something, they want it now. They see a listing they love, they are more likely to go with the listing agent rather than finding someone specific to represent their best interests. Perhaps Teri says it best – Millennials want “fast and shiny,” versus Baby Boomers who are looking to find an agent that will best represent them.
Working with Millennial Buyers
Unlike Baby Boomers, who are looking to be educated by you, millennials often come in guns blazing and wallet open. Teri suggests taking the time to slow them down a bit, educate them on the area and have them experience the community in a way they simply can’t through online research alone.
Millennials are Social Media Savvy (and this can benefit you)
The good news is that once their property is purchased, millennials will quickly share their excitement with their friends online. This is great for you as the agent since you not only gain exposure, but your options for referrals increase. This isn’t to say that Baby Boomers don’t do this as well. Teri believes that most of the success of post-sale social media posting relies on the agent, regardless of the client’s age. For example, asking your Baby Boomers to create a video and share it on social can be just as beneficial.
Millennials are More Visual
After all their online research and seeing gorgeous photos, millennials are more willing to make that purchase right away. Not only do they want things to move fast, but they also want a bargain. The plethora of home value estimation sites are partly to blame for this. Often they aren’t accurate and estimate the home way under the actual value. Understand it may take some time to explain the inconsistencies between what the estimates online and what the seller is asking.
Maintaining Millennial Relationships Past Closing is Also Different
Unlike Baby Boomers who likely have children that will become great referrals, millennials aren’t quite there yet. According to Teri, it’s important to keep communications techy-savvy with millennials and again educate them about the benefits of how the right agent can represent you in future real estate transactions. Once you establish this loyal relationship, referrals will come your way as well.
Millennials Love Tech-Savy Homes
Millennials will soon dominate your luxury buyers and sellers, that is, if they haven’t already. Entrepreneurial millennials have become so popular that Scorpio Partnership and BNP Paribas recently dubbed them “millennipreneurs.” Many of these luxury buyers are in the affluent tech industry and are now looking for the ultimate tricked out home. They are more into lifestyle comforts and having the latest tech features in their homes. As an agent, showing these affluent buyers properties with all the tech “bells and whistles can be a great way to raise the excitement level of home buying and ultimately close the deal.
Don’t Ignore the Power of a Phone call
In an era where text messaging is king, we often think no one answers their phone anymore. Caller ID on cell phones has certainly made sales calls a bit more challenging but according to the stats above, however, 75% of millennials polled also like to be contacted by telephone calls. If you can’t get a hold of your potential client over the phone, the good news is that you have many other contact channels. From email to texting and social, millennials are easier than ever to connect with, sometimes it just takes a reaching out via multiple forms.
Create Digital Versions of Paperwork Whenever Possible
Nothing is more frustrating to a tech-savvy person than snail mail, non-digital signatures and having to pick up documents in person. Whenever you have documents that can utilize software such as DocuSign, take advantage of this. There will far less nagging and follow-up calls if you digitalized this part of the process.
At the end of the day, no matter the age of your client, you as the agent have the power to build these lasting relationships. Understanding what makes millennials tick and how to best connect with them is paramount for earning their trust and loyalty.
In your experience, how is the buying and selling process different when comparing millennials to baby boomers?