By Bridget McCrea
The fact that Millennials like to do things for themselves poses a bit of a challenge for Tommy Choi and other Illinois REALTORS® who are accustomed to stepping in and orchestrating real estate purchases from start to finish.
Choi, co-founder and managing broker at Weinberg Choi Realty, Inc., in Chicago, says working with those 34-years-old and under often involves an entirely new mindset than what agents and brokers have used with previous generations.
“Millennials have a DIY mentality because of all the information that’s at their fingertips online,” Choi said. And while an educated buyer is always welcome in any real estate agency, Choi has noticed sometimes younger buyers overlook the value that REALTORS® bring to the table. No longer just the purveyors of vital information, agents provide a valuable service that no Internet website can replace.
Getting that point across isn’t always easy, Choi said. “There are a lot of statistics, media reports, and information out there that shape reality and tailor it into what the buyer wants to hear,” Choi points out. “As experts, we have to break through that barrier and show buyers the value that we bring to the transaction. When working with Millennials, this task can be somewhat difficult.”
Choi certainly isn’t alone in facing this challenge. Statewide, many Millennials are in the market for homes – both for purchase and to rent – and are in need of professional guidance. According to the 2013 National Association of REALTORS® Home Buyer and Seller Generational Trends, while eight out of 10 recent buyers considered their home purchase a good financial investment, the number was even higher (85 percent) for younger buyers under the age of 32. The median age of Millennial home buyers was 28, their median income was $66,200, and they typically bought a 1,700-square foot home costing $165,000.
Identified by Pew Research Center as those individuals born after 1980 – sometimes referred to as “Gen Y” – Millennials tend to be confident, self-expressive, liberal, upbeat, and open to change. And while the Great Recession has set back the Millennials’ entry into careers and first jobs, Pew says this young generation is “more upbeat than their elders about their own economic futures as well as about the overall state of the nation.”
That’s good news for agents who take the time to get to know Millennials (or, those under-34 agents who are immersed in it by default), understand their nuances, and explore the most effective ways to turn these buyers into long-time clients and referral generators.
Generational stereotypes are common in the U.S. When individuals of Generation X – born between 1965 and 1980 – were coming of age, they were tagged as the “slacker generation” and labeled as underachievers who were reared on TV, divorce, and the earliest home computers. Now, with their 24/7 connected status, social media, texting, and streaming music, Millennials are earning their own distinct labels.
This always-connected status can be a mixed bag for agents like Choi, who is working with an increasing number of Millennials who want to leverage low interest rates and stop paying rising rent. When these buyers come to Choi, most already know what they want and where they wish to live, yet most lack an official pre-approval from a lender. “When it comes to money, they’re never prepared – even though it’s the logical first step in the process,” he says. And those who do know what they can afford in proportion to their income and savings haven’t always factored in expenses such as homeowners insurance, private mortgage insurance, and property taxes.
To help fill in those gaps, Choi says he listens carefully to their needs and capabilities, points them in the direction of lenders who can give educated advice on the buyers’ financial situations, and helps the Millennials make sense of the vast amount of information that they’re accessing online. He pays attention to generational nuances, knowing for example that it’s not likely these buyers will make a snap purchasing decision.
“Millennials like approval and support of their friends and families, particularly when they’re ready to write the largest checks of their young lives,” Choi said. “As a REALTOR®, that’s something you have to factor into the equation, even if it means driving a 20-something couple and their parents around to look at homes on a Sunday.”
“Relationships are still extremely important, but they are handled differently with Millennials than they were with older buyers,” says Bob Corcoran, founder and president of real estate consultancy Corcoran Consulting Inc., in Chicago. “When they text you a quick message asking about a property, resist the urge to ‘call’ them back and instead practice communicating with them on their terms.”
Michael LaFido, vice president of marketing for ERA Team Feinstein, LLC, in Hinsdale, agreed. He says providing instant answers within short timeframes can make or break Millennial-REALTOR® relationships. “These buyers have smart phones with them 24/7,” says LaFido, “and many times possess more information than the buyer’s agent does. When they need someone to get in there and negotiate a deal for them, the REALTOR® has to be ready to respond.”
And while this approach to selling real estate may seem disjointed and distant, LaFido has come up with some good techniques for creating strong relationships with Millennials. In some cases, he says, it starts at a local Starbucks or Barnes and Noble. “Instead of meeting for the first time at a property, sit down with them at a coffee shop and hash out what their needs, wants, and expectations are,” says LaFido. “Get a sense of these things before you take them out.”
In terms of financing, LaFido says he generally points Millennial buyers to a list of “preferred lenders who I know can get the job done.” He sees this as an important step because, in many cases months may have gone by between an initial pre-approval and the actual house hunt. “As an agent,” says LaFido, “I want to make sure my buyers are taken seriously by sellers, who don’t always want to work with purchasers who lack a recent pre-approval letter.”
Recognizing the fact that Millennials respond better to short messages, Lisa Orrell, a generational expert and author of Millennials Incorporated; Millennials into Leadership, says breaking down information into digestible chunks is another good strategy. One REALTOR® she knows, for example, distilled the typical 5-inch-thick closing document folder into more readable and understandable portions and shares that information with Millennial buyers over time versus all in one day. “This is a great way to adapt to these buyers’ desire for shorter bites,” says Orrell.
In the end, both Choi and LaFido say the time they put into learning the nuances and preferences of their Millennial buyers does pay off. “This is a very ‘connected’ generation that has big social circles,” LaFido says. “When I do a good job, I know they’ll tell their circle of influences and that the efforts will come back to me in the form of future sales and referrals.”
About the Author: Bridget McCrea is a business, real estate and technology writer in Clearwater, Fla. She can be reached at email@example.com.
According to Pew Research Center, generational names are the handiwork of popular culture. Some are drawn from a historic event; others from rapid social or demographic change; others from a big turn in the calendar.
The Millennial Generation falls into the third category. The label refers to those born after 1980 – the first generation to come of age in the new millennium.
Generation X covers people born from 1965 through 1980. The label long ago overtook the first name affixed to this generation: the Baby Bust. Xers are often depicted as savvy, entrepreneurial loners.
The Baby Boomer label is drawn from the great spike in fertility that began in 1946, right after the end of World War II, and ended almost as abruptly in 1964, around the time the birth control pill went on the market. It’s a classic example of a demography-driven name.
The Silent Generation describes adults born from 1928 through 1945. Children of the Great Depression and World War II, their “Silent” label refers to their conformist and civic instincts.
The Greatest Generation (those born before 1928) “saved the world” when they were young, in the memorable phrase of Ronald Reagan. It’s the generation that fought and won World War II.