As big a group as the Baby Boom generation is, millennials (those members of society between the ages of 18 and 34) have finally surpassed them in the homebuyer pool. That means most agents are going to be selling homes to a generation with very different needs to their own - and that communicates in a very different way from what they’re used to. You need to know what those needs are, as well as how, why and when to communicate with the new, new buyer. First, though, we need to talk about why millennials are struggling to buy houses until much later than their parents and grandparents. (Spoiler alert: it’s not just because we have a soft spot for lattes and avo toast).
The plight of the millennial
More than 2.7 million Aussies have a hefty HECS debt, and we can assume the majority of them are millennials (since the scheme only began in 1989). Plus, as the generation that graduated into a shaky economy, many have chosen to eschew the rat race in favour of freelancing - which can be done whilst travelling anywhere in the world, thanks to WiFi. This fits in well with the typical millennial’s strong desire for flexibility and mobility, and values (experience over material possessions, always). However, it does have a knock-on effect: milestones like marriage and kids are pushed back to later in life. Even the idea of a house as something to comfortably retire in is changing. This is the generation putting off buying a home til later. Much later. The average age a person starts to think about purchasing a property these days is 38 - which, according to housing experts, means many millennials will be too old to apply for a 30 year mortgage. Unfortunately, it seems many millennials are going to find it very difficult to retire.Combining all of this raises a valid question: Is the white picket fence dream a thing of the past?
A more realistic dream
The short answer to that is no, not quite. The desire to own a home is still firmly embedded in this generation’s psyche - at least one third of millennials want to buy within the next three years. This is especially true for those with a furry friend - a millennial’s favourite accessory (bonus points if it’s of the sausage dog variety). For recent homebuyers, studies show a dog is the third most common reason for the purchase of property - beaten only by the need for more living space and to build equity. Note the distinct lack of ‘marriage + kids’ as a motivator.However, millenials have a more realistic dream. They’re looking at lesser established suburbs than the trendy areas they’ve been renting in during their youth. Instead of a family-sized cottage surrounded by a white picket fence, they’re looking at properties they can renovate - compromising size and condition to get on the property ladder. This is the generation that grew up with flip-and-sell tv shows, after all. So, what does this mean for you as a real estate agent?You’re going to have to become a new, new agent to match the new, new buyer. That means you need to be able to spot a millennial prospect, and nurture that relationship until they’re ready to put down a deposit. Here’s how to get started.
1. Use insights and analytics
Real estate is a numbers game. Of course, it’s about helping people buy and sell houses — and it always will be. But the method used to find those clients, and how you go about pricing their homes or the homes they want to buy, involves a whole lot of analytics.Insights and analytics can help you get a better understanding of buyer readiness, and understand millennials and their needs. If you’re able to spot those millennials that have home ownership on their radar, and you’re aware of what they’re looking for (and why), you’ll be able to focus your efforts where they’re most effective. Luckily for you, there is more data in real estate than most in the industry can even contemplate. For agents operating in Australia and New Zealand, CoreLogic regularly publishes an abundance of property data, information and analytics. Sure, this helps you keep up to date about the state of the market, but there’s also reports on how millennials perceive housing affordability, and the value of houses they’re buying. There’s even a Millennial Insight section of the website. Core Logic UK isn’t so helpful. But, for those of you in the Queen’s Country, there’s Property Data and Hometrack. If you want to sell houses to millennials, you need to know where, when and why they’re looking to buy. Constantly reading and learning from these reports is going to help. If you’re across Google Analytics, you can even check what your millenials visitors are searching for on your website, where they currently live, their interests… and, if you’re comfortable using the advanced section, the pages they’re visiting most. Not across Google Analytics just yet? Keep an eye out for Siteloft’s Getting Started With Analytics e-book, coming soon
2. Keep an eye on renters
Here’s a fun fact for you: over the last ten years, there’s been a 38% spike in the number of households renting - and it’s driven by individuals renting well into their 30’s. And boy, is it costing a pretty penny! Millennials spend more on rent than their parents did - even after taking into account inflation and their higher incomes. It’s estimated the average millennial will pay a staggering $267,000 on rent before they buy a house.But renters won’t might not be renters forever. Some of them are going to buy a house eventually. If you’re only brushing shoulders with the property managers in your agency while making a cuppa, or waiting for the printer to kick in to gear - stop. Now’s the time to start working with your PM’s to get more millennial business.If you can, work out an arrangement with a property manager or two, where you get to add the tenants in their rent roll to your database. In return, you could offer a referral fee if one of those tenants goes on to buy a house. Then, create a custom Tenant tag and add it to those contacts as you add them into Rex. Next time you write (or find) a good article about how to save for a home, questions to ask a real estate agent, or something else relevant to first home buyers, filter your contacts in Rex by that Tenant tag and send out an e-newsletter highlighting the main points. It doesn’t have to take much time - it can be as sporadic or consistent as you want. Remember, you’re building a relationship so that when a serial renter is (finally) ready to buy, they’ll reach out to you for help.
3. Automate processes by embracing technology
In the real estate industry, both organisation and follow up are crucial to success. But with millennials putting off buying a home later and later, potential buyers are going to be sitting in your pipeline for longer than ever. How do you make sure you’re nurturing them all, without letting anything slip through the cracks? With some strategic automation, that’s how. There’s plenty of tools to help you do this:
- Your CRM
A CRM like Rex will be able to remind you when to get in contact with a prospect (depending on their level of buyer readiness), and surface handy templates so it takes all of thirty seconds to remind then that you’re available and keen to help them. We call this feature Tracks.
- Social scheduling tools
Millennials love social media - but you already knew that. In fact, 84% of people between the ages of 27 and 32, and 77% of those aged between 14 and 26, say they use social media daily.Scheduling tools can help you post to social media consistently, with minimal effort on your part - helping you make connections and nurture relationships with the next generation of home buyers. Our favourite is MeetEdgar, but there’s plenty of options out there.
If you’re receiving Facebook messages from prospects, you should be responding quick smart. Remember, following up online leads in 5 minutes or less makes you 9 times more likely to convert. But how can you be sure to give every prospect the attention they deserve - even those messaging you at 4am from their hostel bunk in Amsterdam? Facebook Messenger now lets business pages set up an automatic response for this very situation. You can either turn on instant replies (so the user messaging you receives a response whenever they message you for the first time), or an away message (sent to users messaging you outside of business hours). Let’s not beat around the bush here - you probably got into real estate because you’re good at dealing with people. So, deal with people more when you can, and automate when you can’t.
4. Give millennials IRL experiences
It sounds counterintuitive. After all, this is the generation that hides behind their mobile phones instead of making eye contact or, god forbid, conversation. Yet, for 82% of millennials, it’s important to be able to have a relationship with their agent that exists outside of business, in real life. But how do you strike a balance between being socialising and doing business? Well, millennials seem to love in-person classes, training, or other educational or entertainment events. In the marketing world, this is known as experiential marketing. Sounds fancy, right? Well, it doesn’t have to be. It could be something as structured as a first time buyer’s class, or as informal as a happy hour or wine tasting at your office. The key is to establish a relationship, become a valuable resource and generate brand loyalty. Think of it as a great way to not only attract new millennial clients, but nurture and keep in touch with past clients or fence sitters in your sphere.And, if you extend the invitation to your network of lenders, contractors and landscapers, you’ll also establish yourself as a connector - a one-stop-shop for everything millennial buyers need. And that, friends, is how you nab a millennial’s business. It’s a lot of effort, but trust us - it’s worth it. A whopping 89% of millennials trust recommendations from family and friends over claims by a brand, so if you do you’re job well, they’ll likely be nabbing business for you for years to come.