What is your real estate firm doing to cement relationships with America’s largest segment of the homebuying market?
Gen Y (or millennials) make up the largest group of homebuyers right now at 32% of all buyers. Additionally, this generation makes up 68% of all first-time home buyers.
As Inman states, attracting Gen Y buyers will be a critical activity for real estate firms who want to enjoy success this year.
While some things remain constant for each generation, millennials are the first to have grown up largely as “digital natives” and have influences at play in their decisions which aren’t as prevalent for other generations.
So if you’re looking to attract this very large market, what should you be doing?
Gen Y is typically defined as people who were born between 1980 and 1995. This means that people at the older end came of age with technology, but still remember a time when it wasn’t as prevalent, whereas those at the younger end have often known nothing else.
This generation is more likely than any other to use the internet to search for a home or to follow trends in real estate news. Over 85% own a smartphone and the vast majority own or access internet technology daily. Additionally, more than half of Gen Y and Gen X buyers use their mobile device during a home search.
What does this mean for your real estate firm? If you want to target Gen Y consumers, you need to be present where they are. This means you should:
It may seem counter-intuitive given the relative anonymity that doing everything using the internet provides, but Gen Y puts a high premium on trust and genuine relationships. They won’t readily trust your marketing efforts, because they’re used to “being marketed to” via the many platforms available.
How do you earn that trust? Simply being there with timely, helpful information is a good start, including on social media channels where they can access the information for themselves. For example, if there has been negative press about the state of the real estate market, what information can you put out there that strictly pertains to your local area? Is your local area really reflective of national trends?
Younger buyers are much more likely to place importance on how well you communicate via email or text message, whereas older buyers place higher importance on a phone call. This is not to say you should forget about the phone, but bear in mind that your prospect may have different preferences in terms of communication – just ask them what they’d like.
As part of this, remember that Gen Y actually prefers to work with a real estate agent and may even be reliant on the agent to provide them with good information. To this end, younger buyers place more importance on the honesty and trustworthiness of the agent over other factors, such as the agent’s reputation for results. (Compare that to older buyers who tend to place reputation first).
As part of the value placed on trust, Gen Y tend to be more receptive of anything that has been referred to them by trusted friends or that can show “social proof” such as good reviews on Zillow. In fact, millennial buyers are predominantly referred to their agent through friends, neighbors or family. Don’t forget to encourage your satisfied clients to give you a review, or to refer their friends.
In this age of youthful startup founders and savvy investors, you may be tempted to think that Gen Y are just buying property as an investment and looking to make capital gains. While it may be true that most would like to make a savvy investment choice, research shows that old-fashioned motivations still rate highly.
The realtor.org 2015 Home Buyer And Seller Generational Trends report found that 39% of millenial buyers were buying simply because of a desire to own their own home. This is a need that we’ve carried with us for generations – the simple desire to have a patch of ground to call our own. It also defies the commonly-held perception of “generation rent” who are transient and reluctant to settle.
If you’re doing well at building the genuine relationships that Gen Y clients tend to desire, a part of that is discovering what their true “why” for buying a property really is. For many it is related to deep personal desires they have, perhaps to put down some roots, to have flexibility and control over what happens with their home or even to live more sustainably (part of having control over your home).
[tweetthis]Don’t rely on generational stereotypes: get to know your Gen Y property buyers on a personal level[/tweetthis]
Assuming Gen Y are all looking for central city living or a hipster Silicon Valley-type pad? Nope. An Uli report found that 63% of Gen Y either live in the suburbs or in city neighborhoods that are not downtown.
The Generational Trends report found the following characteristics of typical millennial property purchases:
Following on from the section on internet and technology, you should also consider whether a neighborhood is wired to meet those needs. Even today, not all neighborhoods are set up well for high-speed internet or strong mobile signals.
Of course, none of this replaces having a good conversation with the prospective buyer, building the relationship and drilling down to what is really important to them.
Gen Y have grown up at a time where there is an increasing focus on having a social and environmental conscience. They like to support businesses who contribute to the community and its environmental or social initiatives.
This is definitely nothing new, but has your firm examined what contributions you are making lately? Gen Y aren’t the only ones who will value this: others in the community will be more willing to do business with you, and it can also boost your profile. Being genuine is the key – token gestures will be sniffed out a mile away.
Qualities such as consciousness can also be a drawcard for the types of property and neighborhoods that this generation are drawn to. They may be looking to minimize their footprint, join a neighborhood with a thriving community spirit or be close to activities they enjoy such as sporting or recreational facilities.
Gen Y are firmly taking their place as the new generation of property owners. A savvy real estate firm should be aware of the characteristics of the millennial generation and understand what attracts them.
Technology plays a huge role, with the vast majority of millennials using the internet in the home buying process. Other characteristics such as neighborhood compatibility with internet and mobile requirements, proximity to work and the value provided by the property are all important considerations.
The best thing you can do (like any other customer), is build a relationship of trust with your Gen Y clients. This will often result in you being rewarded not only with their business, but their referrals.