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Have You Bought into this Dangerous Myth about First-Time Homebuyers?

August 29 2016

ixact myth 1st time buyersFirst-time home buyers have historically been a large niche for real estate agents. As each generation enters the workforce, their desire to own a home logically follows after quite soon.

This trend has been hotly debated as the rise of the millennial homebuyer has spurred some interesting opinions.

Conversations in recent years have resulted in many Realtors believing the millennial generation is the first group to break the status quo of home ownership. Are you one of the real estate professionals who don't feel that first-time homebuyers are a worthwhile source of leads anymore? If so, this new research will surprise you.

Let's explore the recent myth of the first-time homebuyer, and how you can profit big time from this important group.

The Myth About First Time Homebuyers

It seems like you can't pick up a newspaper lately without reading about unpaid interns or unemployed college graduates living in their parents' basement. We hear a lot about the millennial generation's struggle to enter the workforce.

As a result, the assumption has been that millennials will put off purchasing a home later than previous generations have.

Because of the media coverage on millennials, many real estate professionals believe that there will be a delay for this generation to begin purchasing property. We've been told that the market is simply too expensive for first-time homebuyers.

But recent research conducted by Zillow shows us that this assumption is incorrect. I would argue that continuing to believe this myth can be harming your success as a Realtor by missing out on sales and referrals.

The Truth About this Lucrative Group

According to Zillow, 53% of all sales in 2016 were to first-time buyers. That's over half of all sales!

The study found that the average buyer was 36 years old, and half the buyers identified as being millennials.

Because of low-interest rates, it's more affordable to purchase a home today than it has been in decades. Zillow's study found that today's borrowers are spending an average of 15% of their income on their mortgage, compared to the 30% that they spent during the 1980s.

So, despite what we've heard about first-time buyers putting off home ownership, the truth is that first-time home sales are increasing. And millennials make up a significant portion of those buyers.

Why Are First Time Buyers so Worthwhile for Realtors?

Loyal, repeat clients are highly desired by Realtors. These clients come to you naturally because they're satisfied with their experience in the past. You don't have to chase them through cold calls or prospecting, because when you keep in touch regularly, they come back to you when it's time to list or buy another home.

When you secure the business of a first-time homebuyer, you're connecting with them at the beginning of a potential lifelong relationship. When you provide excellent service and keep in touch after the close, these first-time homebuyers will become valued repeat clients down the road.

There's another powerful reason why first-time buyers are especially important for Realtors. They have the power to vastly expand your network!

Family and friends are highly important to younger first-time homebuyers. If your buyer shows up at a meeting with mom and dad in tow, along with their aunt, cousin, and a car load of friends, you're given a priceless opportunity to connect with each of these additional contacts.

When you make a positive impression on the family and friends of your first-time homebuyer, you are building your database and potentially setting yourself up for additional referral business.

How to Capitalize on this Group

Understanding the value of first-time home buyers is the first step. Knowing how to capture more quality leads from this demographic is step two.

Zillow's research found that 32% of the buyers found their agent through a personal referral. Regularly keeping in touch with all your past clients with a monthly e-newsletter and keep-in-touch phone calls and asking for referrals will help you stay top of mind with past clients and ensure yours is the name that comes to mind when they're asked to recommend a Realtor.

The study also found that 28% of first time homebuyers found their agent online. It's obvious that a web presence is crucial for a real estate agent to be found online. Give first-time homebuyers the right impression by maintaining a professional, mobile-friendly Realtor website. Blogging on a regular basis is a powerful way to boost SEO and ensure your website appears in search results when a prospective homebuyer is searching for a Realtor. Since many prospects are using their mobile phones or tablets to search, it's imperative that your website displays properly on all devices to give visitors the right impression.

The process of purchasing a home can seem daunting to someone who has never done it before. Try hosting a first-time homebuyer information seminar in neighborhoods with many rental properties. You can answer questions, offer information, explain the process, and collect contact information from attendees. Seminars like this establish you as an expert on all things home-ownership related and help you build your contact list.

As you collect more contacts in your real estate CRM, assign renters to an email nurture campaign that is specifically suited to their needs and concerns. Nurturing renters as they make the journey to becoming a first-time homebuyer is a long term process, but your reward can be a loyal, lifetime client and powerful referral source!

Takeaways

It's time to shift our thinking about first-time homebuyers and realize that this niche demographic is growing every year.

First-time buyers are a lucrative group for real estate agents to pursue because they can lead to many years of repeat business and valuable real estate referrals.

To gain more first-time homebuyer business, Realtors should have a professional Realtor website and stay top of mind with renters by assigning them to a targeted nurture email campaign.

To view the original article, visit the IXACT Contact blog.