The face of the average home buyer is continually evolving, a development driven by extensive technological, economic, and cultural forces. As real estate professionals, it’s important to understand your clients’ challenges and expectations. With this knowledge, you can optimize your business for the ever changing landscape of the real estate industry.
The influence of technology on the buyer’s journey
The home buying process is increasingly starting online for most people – prioritizing websites with high-quality photos, detailed property information, floor plans, and virtual tours. Buyers are using the internet and mobile applications to both search for properties and find agents, which is why it can be advantageous for agents to build a robust, mobile-friendly online presence. Consumers’ propensity for research also suggests that agents can benefit from managing their online reputation. When researching local businesses, 84% of consumers trust online reviews as much as personal recommendations when there are multiple reviews and the responses seem authentic. Agents can bolster their online reputation by encouraging past and present clients to leave feedback online. Depending on the circumstances, negative reviews can present an opportunity to tactfully reach out to your former client, listen, learn from the experience, and potentially mend the situation.
Generational financial constraints
The Millennial generational group, aged 37 and younger, represents 34% of all home buyers. Compared to earlier generations at this age, Millennials have “lower earnings, fewer assets, and less wealth,” on average, which can be attributed in part to student loan debt. As a result, it can be challenging for some to put 20% down when buying a home. In fact, Millennials are 54% more likely than other groups to view the down payment as the most difficult step in the home buying process. Knowing this, you can help guide your clients to a financial plan they’re comfortable with. They may be interested to learn more about first-time home buyer programs, local or federal government incentive programs, and low down payment loans. These solutions can help those who are financially constrained overcome friction associated with entering the housing market.
Changing home buyer preferences
Many buyers are willing to compromise on square footage in prioritizing affordability and amenities. From 2003 to 2018, the number of buyers willing to reduce their home size to keep costs down increased from 31% to 42%, while those willing to forgo a basement increased from 29% to 44%. With regards to amenities buyers consider essential, the top features include a laundry room, dining room, garage storage, walk-in closet in the master bedroom, bathtub and shower in the master bathroom, great room, 2-car garage, and a double-sink in the kitchen. By better understanding the compromises your clients are willing to make, you can narrow down the scope of properties that would interest them.
The Greek philosopher Heraclitus said, “Change is the only constant in life.” The real estate industry is continually evolving as a result of wide scale global change. As agents, understanding the forces that influence home buyers’ behavior can help you better represent your clients and anticipate the challenges they face.