Understanding First-Time Homebuyers: What to Know, and How to Serve
By Marc Gould
The summer buying season is in full swing, and first-time homebuyers make up a sizeable portion of your firm’s potential clientele—32 percent, according to the National Association of REALTORS® (NAR).
What do we know about today’s first-time homebuyer? Most are married couples with no children and a combined income of $77,500. At an average age of 31, almost 70 percent are millennials. According to NAR’s latest generational trends survey, first-time buyers place a high value on home affordability and commuting costs more than any other buyer group. Not surprisingly, technology plays a strong role in their home-buying process. In fact, first-time buyers typically find the home they purchase on the Internet. When it comes to communicating with their agent, these buyers strongly prefer email and text over phone calls.
First-time homebuyers tend to purchase detached single-family homes at a median price of $170,000, likely financing 95 percent of the purchase price. With hefty student loans, first-time buyers often have a difficult time saving for a down payment. Agents should direct clients looking for down payment assistance to their state’s housing authority, which may offer first-time homebuyer grants or loans. Ensure your agents are serving first-time buyers by providing some guidance on financial assistance if needed.
According to NAR’s 2015 Profile of Home Buyers and Sellers, helping buyers understand the home-buying process tops the list of what first-timers value most about working with an agent. To attract this group of clients, bulk up your website and social media platforms with resources that explain the ins and outs of the process.
First-time homebuyers also value an agent’s ability to improve their knowledge of the area. At your next company meeting, highlight local-centric tools on realtor.org that can be used as go-to informational resources. For example, the REALTORS® Confidence Index provides a monthly snapshot of market conditions, price trends and issues affecting real estate transactions in your area. Local market reports, also found on realtor.org, provide quarterly summaries of your housing market with unique statistics.
Finally, an important part of working with first-time homebuyers is reducing your own risk. Make sure your agents are fully versed in your firm’s buyer representation policies, and that they’re well-trained in leading successful buyer counseling sessions. These sessions should thoroughly review the elements of your buyer representation agreement, clearly explaining exclusivity, scope of work, compensation and applicable brokerage fees. The ABR® designation course is designed to do just that. Students learn how to conduct a buyer counseling session, sign buyer clients to a written buyer representation agreement, negotiate buyer clients’ offers, and bring the transaction to a successful close.
Educate your team on the unique attributes of first-time homebuyers, and let their preferences dictate your firm’s best practices for serving them. Distinguish your company as the experts in home buying and the local market, and encourage your agents who hold the ABR® designation to take advantage of all the resources at REBAC.net. With the right mix of knowledge, resources and interpersonal skills, your agents can turn prospective first-time homebuyers into happy and contented homeowners.
Marc Gould is vice president, Business Specialties, for NAR and executive director of REBAC. A wholly-owned subsidiary of NAR, The Real Estate Buyer’s Agent Council (REBAC) is the world’s largest association of real estate professionals focusing specifically on representing the real estate buyer. With more than 30,000 active members, REBAC awards the Accredited Buyer’s Representative (ABR®) designation to REALTORS® who work directly with buyer-clients.
For more information, visit REBAC.net.
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