In 2020, first time home buyers make up 33% of the buying market. That’s a large group! So, there’s a good chance you’ll work with some, or already are. Understandably, this category needs a different type of support from their real estate agents. Here’s how you can help them and make the most out of your client relationships:
Most first time buyers are millennials
Millennials now make up the largest share of home buyers, a whopping 38% of buyers. 86% of younger millennials (born between 1990-1998) and 52% of older millennials (born between 1980-1989) are first-time home buyers. So, when you work with first time home buyers, you’ll likely be working with millennials.
As a group, Millennials tend to be more tech-savvy – with 92% of millennials looking online for a home and 77% finding the home they purchase online. And, millennials research more agents (2-4) than previous generations – using a variety of online tools.
How you can help: Be available. Have an easy to navigate website with reviews and listings. Answer messages using your social platforms and texting. The more engaged you are, the more helpful you are.
And are entering the market later than before
Over the last decade, the average age of first time home buyers has risen. Today, first time home buyers are, on average, 32.5 years old. That’s up almost 3 years from the 1980 first-time home buying age of 29.6 years old.
To save up, potential first time home buyers have turned to renting for longer than they used to. The average first time home buyer rents for 6 years today, which is a year longer than the 1980 average of 5 years. Since first time home buyers have a longer rental history on average, they may not know many of the costs associated with owning a home.
How you can help: You can offer education on potential homeownership costs, like routine maintenance, replacing broken systems, etc. This will ensure that your buyers feel confident going into the process and you’re able to build the trust that will result in them referring others to you.
These buyers often have more debt
First-time buyers currently have more debt than in previous years. The average first time home buyer has $29,000 in debt, mostly from student loans. With the rising cost of college tuition and stagnating wages, first time home buyers have struggled to pay these off – which makes it hard to afford a home and particularly difficult to save up for a down payment. As such, most first time home buyers put down half as much as other buyers, at an average of 6%, as opposed to the average of 12%.
How you can help: You can offer complimentary financial workshops to give expert advice on how to save for a home, while still paying off debt. Looking for a lighter lift? You could also create content (like blog posts, social stories, or flyers) that offer small soundbites.
And are looking for suburban single-family homes
Although first time home buyers tend to be younger than repeat buyers, they’re not as attached to trendy, urban areas as you’d imagine. In November of 2018, 24% of home sales were in urban areas. However, in March of 2020, only 15% of home sales were in urban areas. First-time home buyers are moving away from crowded urban areas to more spacious and private suburban areas.
And, more first-time home buyers are buying single-family homes. From November 2018 to March 2020, condo sales had declined by nearly 33%. So, more home buyers are looking for single-family homes than multi-family properties.
How you can help: Create a list of fun things to do in suburban areas near you. First time home buyers might miss all the events, restaurants, shops, and more in cities. So, a list of local events, favorite restaurants, cool shops, and more can help them adjust better to suburban life.
The not-so-secret secret to success
New home buyers are looking for expertise. They’re new to the market and are unsure what to expect. Offer up knowledge freely and in an engaging way. Understand their unique struggles and do what you can to educate them about financial options available to them. First time home buyers can benefit from educational programs or content – which you can create to attract more first-time home buying clients.
Want to make sure your first-time home buyers win the home they love – even in a competitive market? Ribbon’s Cash Offer program is here to help.