For years, Millennials have largely been thought of as renters, not buyers, but that has changed. Millennials, born from the early 1980s to the early 2000s, now represent the largest group of homebuyers in the U.S. at 32 percent, taking over from Generation X, according to the 2015 National Association of Realtors (NAR) Home Buyer and Seller Generational Trends study released today, which evaluated the generational differences of recent home buyers and sellers.
This matters because the way Millennials buy real estate is markedly more technology-driven than older generations, and Realtors need to adapt to their style if they want to keep up, says David Maez, Broker and Co-Owner at VIVO Realty.
“There’s lots of frustration among older agents in working with the Millennials, but they’re not going away and agents need to learn to adapt,” Maez said. “It’s exciting because of all of the technology that’s available to us to make it easier to buy and sell properties. How people buy properties is going to continue to evolve on the technology level.”
Take, for instance, the telephone. Many Realtors are used to speaking with clients, but Millennials are much more into texting.
“With Millennials, you have to communicate how they want to—they are big on texting and many don’t even answer their phones,” Maez said. “Some agents have had success using Facebook messaging because [their Millennial clients] are not checking their email, either.”
The smartphone is key to a lot of the differences in Millennial real estate patterns. More than half of them search for homes on their mobile phones and 26 percent of those buy a house they found that way, according to research from NAR.
For seasoned Realtors, the fear seems to be that Millennial real estate agents are going to work better with people of that generation. But a 2012 NAR survey found there aren’t that many: only 3 percent of agents were under 30 and 81 percent were older than 45. About 25 percent were over 65.
So how can Realtors create a business model that works for Millennial buyers, as well as older buyers?
“You adapt to the way your client likes to communicate—certain clients expect me to pick up the phone and have a conversation, but it’s not really a challenge to relate to my peers as far as using technology [either],” said Kenneth Walters, a Realtor at Ebby Halliday’s Little White House, who is himself a Millennial. “I’ve developed a team of vendors that are good at communicating with Millennials through text or email—I have mortgage, title, and insurance companies that are all willing to communicate the ways my clients prefer.”
With one mortgage company Walters uses, the client fills out the application online, the officer responds back with an email that says what paperwork he’ll need, and the client can upload it directly to the system. No phone calls required.
“There are a few title companies that have adopted the Zoccam app and it allows Realtors to deposit earnest money with the title company directly from their phone,” he said. “It’s not just Realtors who are having to adapt, we’re seeing it industry-wide.”
6 WAYS MILLENNIALS ARE CHANGING REAL ESTATE BUSINESS
1. They’ve done their research
Realtors should expect that Millennial clients will show up with their homework done: neighborhoods targeted, comps downloaded, amenities understood. They don’t need an agent to tell them what’s available, but rather to offer expertise on the neighborhood and things they can’t find online.
“The Millennial will find the property, but you as the professional need to be able to interpret and verify the information,” Maez said. “They are expecting their agents to be experts in their field—if you have the same information as them, you’re not offering them value. You should know everything about that neighborhood.”
2. Texting versus calling
Phone calls are seen as an inconvenience and Millennials often expect to be notified via text before someone calls them so they can prepare. Realtors who embrace texting as a quick and easy way to communicate the basics will go further with this generation.
3. Socially obsessed
Millennials are more casual, they’re all over social media, and they want their Realtors to be both those things, too. “Realtors should not only have a Facebook business page, but also a personal page where they can friend their past clients and those they are working with now,” Maez said. “Facebook is like a cocktail party and it can be used casually to meet people.”
Millennials want their news yesterday, so social media is great for sharing pre-MLS listings. “All of my properties, before they officially hit the market, can be found on my social media [channels],” said Walters, who uses BubbleLife, which aggregates news by specific neighborhoods. “I write a brief story about my new listing [on BubbleLife] and then I share it via Twitter, Google+, Facebook, and get a ton of traffic without actually having to put it on the MLS.”
4. It’s all about apps
Apps like Trulia and Zillow are de rigueur for Millennials, who will narrow down neighborhoods and listings before ever meeting their Realtor. Some early adopters have created real estate apps that can be personalized for an agent.
“Ebby created their own mobile app and when a client downloads it, it sends me updates on everything they’re looking at,” Walters said. (If you’re on a mobile device now, the link to his app is here.)
5. Expert agent on demand
A good Realtor match for a Millennial client is someone who has established him- or herself as a neighborhood expert. One way to go about that is through blogging and creating in-depth articles that examine facets of each community. “If you consider yourself an expert in a location, you need to blog on it, and if you don’t have writing experience, you can hire somebody to do that for you,” Maez said.
Because they are so tuned into the online world, Millennial clients will have researched their agent and read online reviews, too. “They expect a lot of the professionals they work with and they know a lot about the Realtors they are working with,” said Maez. “They are going to do the research before they get in your car.”
6. Fast communication and decisions
The Millennial buyer is mobile and fast to gather and communicate the information they need in real estate transactions, making them a more informed consumer overall. They demand Realtors who are fast on their toes, too. “They’re pretty decisive on what they’re looking for—when I have an initial consultation with them, they’ve done a lot of research and know what neighborhoods they are interested in,” Walters said. “They make decisions quicker because of the information they do have, where someone else who hasn’t done the research may want additional information on the property and may miss out on it because inventory is moving so quickly.”
What is your experience working with Millennials in real estate? Do you have any other insights to share? Leave us a comment!