With nearly half of homebuyers this year being first-timers, real estate professionals can help the nervous customer in numerous ways
By many estimates, first-time buyers will make up about half of all buyers this year, and more than six in 10 of these will be millennials. One poll indicated that 45 percent of millennials (ages 22 to 37) expect their first home will be their “dream home.” Drawing a sharp contrast is a recent Bankrate study of homeowners, which found 63 percent of millennials (ages 23 to 38) had "buyer's remorse" after purchasing their first home.
Regardless of generational nuances, real estate professionals know that first-time homebuyers may require special treatment.
RE/MAX agent Katie Beamon, based in Northern Colorado, finds working with first-time homebuyers to be rewarding. She offers a class called “Myth Busters,” for first-timers, at which she brings in a lender to answer questions. It’s often set in one of the area’s craft breweries, which makes for a fun—and educational—event. She’s been able to help clients with loans geared toward new homebuyers, such as Fannie Mae's HomeReady loans.
“Millennials are a blast,” says Beamon. A Generation X’er, Beamon cautions that it’s not helpful to label millennials according to demographics. “They don’t want to hear that.”
She adds, “you have to give them the tools,” noting that RE/MAX’s app for buyers rivals any out there. Her experience is that millennials will often come armed with information, have done considerable house-shopping online, and sometimes have to be reminded to take their time to comparison shop in person.
In addition, RE/MAX arms its agents with tools through its RE/MAX University, an online education platform that includes learning tracks such as "Working With First Time Buyers in a Challenging Marketplace," and "Enticing First Time Buyers."
The top Google request related to home buying is “how much mortgage can I afford,” says Amy Bonitatibus, chief marketing officer for Chase Home Lending. She took note of Bankrate's study of millennials with "buyer's' remorse," and cautions that newer homebuyers should be conservative with their budgets. “It’s a given for us when meeting with a customer, making sure it’s a mortgage they can afford,” she says.
“The good news is consumers today are more educated,” she says. “They may have seen what friends went through during the housing crisis, so they’re coming to the process a bit more educated.”
“Because of the frequency of unforeseen maintenance issues, we want first-time homebuyers to have money in reserves.”
She also notes that Chase has taken steps to improve its mortgage closing processes and is working to strengthen a loyalty program for real estate professionals, called Agent Express. Chase also recently announced a program called “Closing Guarantee” for existing customers, in which it promises to close a mortgage in 21 days; if the bank doesn’t close on the loan in the timeframe, it will pay the borrower $1,000.
Dealing With Unforeseen Issues
Recalling her own days as a first-time homeowner, Bonitatibus highly recommends the buyer seek a home warranty from the seller to prevent from unforeseen expenses.
In the Bankrate study, the leading reason for a new homeowner to regret their transaction was maintenance issues and hidden costs.
Forewarned is forearmed, and that's why a home inspection is so important, particularly for new buyers. A professional home inspection not only educates buyers on the condition of the home but can minimize costly surprises down the road. HouseMaster provides first-time home buyers with tips to "Inspect the Inspector" to ensure they make an educated decision when purchasing a home and get the best inspection possible.