Digital Natives Have a Different Way of Researching, Shopping and Keeping in Touch
Like most industries, and the way we live, lending and real estate are changing because the largest cohort of consumers is changing. Our newest, largest wave of potential homebuyers are millennials who are preparing for and easing into homebuying in ways very different than their parents and grandparents. As digital natives, millennials research, shop, communicate, and raise a down payment are also different from the generations before as well.
Because they’re doing things their way, industries courting this market must adjust to optimize a connection in different ways too. If we want to compete on this new, high-tech playing field, communicate with them the way they want to be communicated with so you can help them understand their homebuying advantages.
Buyers in Need of Guidance
Millennials are expected to overtake baby boomers in sheer size in 2019, and they’re already the largest segment of first-time homebuyers. Why is this so important to real estate agents and loan officers? Well, as the saying goes, “This isn’t my first rodeo.” Once a person has purchased a home, they don’t usually need as much assistance as those who have never done it before. Also, they are not as in need of many of the types of programs first-time homebuyers are, such as low down payment options, down payment assistance and homebuyer education resources.
Reaching millennials with the knowledge they need is a great way to connect with them. Respect their need to self-serve and research at their own pace in the beginning but be prepared to offer helpful information once a connection is made. Use finesse in this stage of the game when an overt sales pitch might turn them off. Send relevant, helpful content and use phrases such as, “I thought you might find this interesting.” It can be a text, email or social media post. Pro tip: Find out their preferred method of communication early on. (More about this below.)
New Behaviors, Old Ideas
Though they’re connected and have access to the entire internet of information, young homebuyers may still believe many of the old, traditional rules their parents and grandparents have passed on without realizing it.
These traditional homebuying “rules” (now homebuying myths) may include:
You need a 20% down payment
You need to have excellent credit
You can’t have a high debt-to-income ratio
You should be married and ready to have kids before you buy
Those in the industry know these are no longer true but if a young person has internalized his or her parents’ life experiences, they may not realize these “rules” may no longer apply. When they begin their research process, hopefully, they’ll quickly learn that things have changed.
How Professionals Can Help
Down payment assistance (DPA) programs are probably one of the better-kept secrets in the housing industry and the fact that the recipients don’t necessarily have to be low income even more so. Loan Officers and Housing Industry Professionals who regularly keep apprised of their state’s options can provide a valuable service to their clients. Since the down payment is often considered one of the biggest hurdles to homebuying, the sooner potential buyers can overcome this, the sooner they might be able to purchase a home.
Individual states may offer DPA for veterans, law-enforcement professionals, educators, recent college graduates, etc. Making it a habit to search your state’s first-time homebuyer programs every few months in order to share the information with clients may speed their homebuying goals by months or even years. This also gives professionals an ideal opportunity to reach out to contacts every few months to share tips and information without being too obtrusive.
Communicate with Clients in Their Terms
There are so many ways to communicate these days, and one thing is becoming increasingly more evident – people tend to have one or two preferred modes of communication and using the others risks annoying them. For those who prefer text, a phone call might be perceived as too intrusive. Those who prefer email might ignore texts. If they want to speak with a real person, robocalls or email will likely garner no response. One of the best ways housing industry professionals can keep in touch with their “incubating” clients is to learn their preferred method of communication and use it. From there, it is easy to check in (periodically) to share relevant tips.
Keep clear notes about your clients so you are sure to connect with them on their terms and also know the issues the client is working on so you can share personalized content and information. If you utilize an app such as GoGo Partner from New American Funding, you can make notes for each client and log their communication preferences, where they are in their homebuying journey, and what type of information/assistance they might need or tend to respond to.
For instance, if you have clients who have almost compiled their down payment but are working on clearing up their credit, you might check in with them with a quick text: “Hi, I hope all is well. Last time we talked, you were working on your credit – I thought you might find this helpful. If you have any questions, give me a call.” And link to content with tips about raising one’s credit score.
Keep it Light and Low Pressure
People remain in contact with professionals or follow them on social media because they are interested in their input or products. This is a great way to build trust and a comfortable relationship. But beware of too many overt sales pitches because they can quickly become a turnoff. Extend help and share information in a personal way, so it doesn’t come off like a blanket pitch or form letter, and offer answers to any relevant questions they ask.
If you sense, by their questions, that they’re nearing the point where they move from “casual shopper” to “serious buyer,” you can increase your contact, with content that may be more immediate. An example would be offering to get them preapproved or sharing the GoGo Home app that will help with their search.
With all the ways there are to communicate, share tips and knowledge, and keep in touch, understanding how your potential customers want to be communicated with is half the battle. As the professionals, we must learn and grow to capture the millennial market by speaking their language.