6 Things That First-Time Buyers Want Their Agents Know
As part of the trends and stats of this year, we know that millennials are still buying homes despite the constant changes in the market and the reduction on inventory. While there are general challenges that every first-time buyer faces – where to buy, determining a budget, finding a trusted agent, etc. – there are new obstacles that every generation has to overcome, which the past generation usually has no advice for. As an agent, it’s important for you to not only be aware of these specific struggles but to help your first-time homebuyers navigate them, too.
Here’s what your first-time buyers want you to know.
1) They Are Hunting for a Reliable Lender More Than an Agent
Most agents tend to think that first-time buyers are very concerned about finding a reliable agent. While this is true, what many agents don’t realize is that these buyers are just as concerned – if not more – about finding a reliable lender. Lenders that want to work with them and give them honest advice about buying their first home, and not someone who clearly wants to take advantage of those new to real estate. First-time homebuyers are just as likely to take a personal recommendation on a lender as they would on an agent. It’s also important that homeowners are not approved for more money than they can ever imagine spending – a major turn-off.
2) They Don’t Want Your Inspector Recommendations
First-time buyers have many more resources available to them today to help them in the home buying process, much more so than the generations before. This means that they are hyper-aware of what to look out for, especially when it comes to inspection time. They know that they need to have their own inspector, and to be on top of even the smallest things. However, many first-time buyers have complaints about how many agents and businesses are referring to each other, and how these referrals are usually never in the best interest of the buyer.
I spoke to a first-time buyer who said, “Unfortunately you never know how your agent is with their recommendations. Was something overlooked or not done in-depth simply because they’ve worked a lot with each other and want to bring each other business?” As an agent, it would, therefore, create better rapport with your client if you suggest that they bring in their own inspector, instead of just recommending your own.
3) They Have Been Saving for Years for Their Downpayment
One thing that first-time buyers are struggling with is having enough money for a downpayment, as the cost of living in the U.S. combined with student loans is making it harder than ever for young people to buy. They want to avoid falling into the same trap that their parents fell into in the 2008 recession and want to have more control over their financial situation.
This means that more first-time buyers are looking to put down more money to avoid higher interest rates and longer repayment plans. But, saving that much money takes time. Agents, therefore, need to be extremely sensitive and aware of the labor and sacrifices that go into millennials saving up for a downpayment, and it’s important that their budgets are respected.
4) They Want an Agent That Trusts Them, Too
We talk about trust a lot in this industry. But, usually, we only talk about the trust going one-way – that buyers want to find a trusted agent, a trusted lender, a trusted inspector, etc. What we don’t talk about is how buyers also want their agents, lenders, and inspectors to trust them, despite any shortcomings.
Cameron Iuliucci, who is in the process of buying his first home now and saved up 40% for a downpayment in five grueling years said, “What I would want these people to know is that six years ago I was an addict. My credit is terrible. But, now, I’ve been sober for four years, so please give me another shot. This way, my wife doesn’t have to try and get a mortgage without me on it.”
If you have an interested client that has the means to buy a home but they want to take a different path, do what you can to help them find their way.
5) They Are Terrified Imposing Closing Costs and Commissions
After the stress of saving up for a downpayment, most first-time buyers are shocked when they see the closing costs. Therefore, they are very likely to ask you questions about this from the get-go, and it’s vital that you give them as much honest information as possible right from the beginning. This will help avoid having a client that backs out right before closing the deal.
Tom Krisa, who recently bought his first home, was happy that he had an agent that was on his side. “After using my savings from high school for my downpayment, when I found out that it was going to be 18k in closing costs, that totally scared me. So, they told me that I could ask the seller for something called a ‘seller concession.’ We bought our house for 315k. However, because we had a seller concession, we financed 327,500 and the seller gave us the 12.5k extra towards closing costs.”
Remember, while it’s okay to be in real estate for the money, it’s just as important to be helpful to your clients.
6) They Don’t Love Your Use of Technology
Technology can have many benefits for both agents and their clients, and we know that those that utilize technology are much more likely to be successful than those that don’t. But, Tom Krisa also said that he was thrown off by some of the technology his agent used, and preferred simpler, old-school methods to the new ways of doing this.
Tom said, “I didn’t like signing everything online at DocuSign because I had no idea what I was signing sometimes. It skipped to the signature requirements and you had to scroll back up if you wanted to read.”
As an agent, it’s a good idea to have a balance of new and old ways of doing things. And, when in doubt, always ask your clients what they’d be more comfortable with. Never assume that just because your first-time buyers are young, that they prefer digital all the time. Remember that many of these buyers still grew up in a time where cell phones and the internet were not yet a way of life.