Agents and the Digital-led Approach for Millennial Homebuyers
With millennials now forming the largest demographic in the US workforce, it’s unsurprising that they also now make up the largest group of homebuyers, at 38% according to the NAR. As the era of baby boomer buyers draws to a close, millennials (those born between the early 1980s and the early 2000s) are the ones who are introducing not only a new era, but new trends and expectations in the homebuying experience compared to previous generations. Inevitably, real estate itself will have to work hard and work quickly in order to accommodate this fast-growing demographic.
While the industry is notorious for being resistant to change and slow to adopt new methodologies, the rise of tech-smart millennials and tech-oriented house hunters is changing that. Agents who are able to meet millennials at their point of need will almost exclusively be those who are digitally-agile and able to offer that all-important balance between tech solutions, customer-centric data and interpersonal negotiation skills. To understand why it is crucial for agents to adopt a digital-led approach in dealing with millennials, we need to better understand what the millennial customer profile looks like so far.
- Because millennials are natives to a digital landscape, 99% of millennial homebuyers find their homes online and are proficient in doing their own research and narrowing down options.
It’s vital for agents to constantly update and upgrade their online listings on their platforms so as to stay relevant and informative. CRM software, for example, is an important and cost-efficient investment that will reap many rewards. It can be tailored to each agent or firm, improves onboarding and overall operational efficiency and greatly reduces time and energy spent on tasks that can be automated.
- 78% of millennials found the home they ended up buying on a mobile device, so agents need to place emphasis on making sure their presence is universal and timely across all their digital platforms.
Some agencies even outsource images and videos that are optimized to each social media platform as they would appear on a mobile device, (horizontal video, square fit, high-res etc). For example, the same piece of content will have different displays optimized for Facebook, Instagram, Twitter, etc.
- Millennials are visual, preferring live-stream and video rather than just a description or photos of a listing.
Agents need to create more dynamic content that nudges clients down the decision-making pipeline, online. It could be employing exciting drone footage of the house and outside areas, or including 3d virtual tours or virtual staging websites to give a realistic view of the place (a tactic that has only gained momentum in a post-COVID world). In fact, a 2019 report revealed that 85% of staged homes sold up to 25% more than unstaged homes. This also gives prospects the opportunity to share tours with friends and family - a helpful feature as over 25% of millennials receive some form of financial assistance from relatives when it comes to home buying.
- Millennials have new priorities and different demands than previous generations: agents need to become familiar with new features that are now prioritized by millennials, including laundry rooms (86%), patios (81%), garage storage (80%), eat-in kitchens (78%) and a walk-in pantry (79%).
More and more homebuyers now seek an extra bedroom that has potential to be converted into a home office. Agents who are able to speak to the shift towards ‘workplace tech’ with prospective clients will more likely win their loyalty, as the years leading up to the COVID pandemic (and the global crisis itself in 2020) has spiked a necessary interest in working from home and becoming free of geographic constraints. Ironically, agents themselves have been adapting to working from home in the face of the global lockdown.
- Millennials, being the most educated generation in history, are also very value-driven. Social media and prolific, easily-accessible information has in a way nurtured millennials into desiring ever-more specific features in life, as well as in their desired homes. We see this in a marked increase in eco-conscious homebuyers, interested in the materials and methods with which homes are made, how many hours of sunlight a place receives, etc.
The digital agent who is comfortable with AI-enabled tools and other digital platforms will be able to anticipate many concerns of millennials, simply by being able to handle and extract meaning from big data and predictive analytics. Big data can deal with an exponentially larger set of parameters that, when matched up against a particular client, furnishes the agent with real-time insights for best-match locations above and beyond the competition, justifying value to clients and retaining them. From how eco-friendly a house is, to the neighborhood’s recycling route, to number of registered sex offenders in the area, to how many schools there are within a 10 mile radius - the digitally-equipped agent will be able to provide that much more insight when it comes to helping millennials find their dream home.
- In decades prior, homebuyers sought out agents because they were the gatekeepers to information. Now, agents are valued for their negotiation skills, industry knowledge, quality customer service, relationship with other brokers, and inherent ability to keep up with marketing strategies.
Unfortunately, many agencies and brokerages still don’t understand how crucial it is to leverage social media strategies to build referrals and generate leads. According to a 2019 NAR report, only 20% of firms had social media guidelines for professional social media accounts, which somewhat explains why 46% of all firms admitted to having difficulties keeping up with technology. 45% stated worries over competition from non-traditional players, and another 27% cited concern over competition from virtual firms. While any shift from analogue to digital might seem dramatic and full of unknowns for long-time players in the industry, it’s imperative for agents and firms to realize that resisting new communication techniques via digital means will hinder them from catching up to competitors while losing out on an entire generation of prospects.
- The longevity of millennial clients - 79% of millennials in the housing market are first-time homebuyers, so it’s unlikely their first home will be their last. 59% of homebuyers under the age of 29 don’t expect to be in their home for more than 10 years. 28% of them plan on being in their new home for less than five years.
Millennials pose as great, long-time opportunities and a strong client base for agents if agents can garner their trust and continued interest. It’s vital for agents to remember that millennials value resources, not a sales pitch.
Agents need to establish themselves truly as experts in their field in not only closing the sale with a millennial, but enriching the relationship by continuing to add value beyond final transaction. Brands all over the world set up Instagram or Twitter accounts not just to sell, but to retain consumer interests by delivering content every day. Content is the true millennial currency, and it will convert well in real estate too. Agents can create incredible value for past and current clients by a number of activities: hosting a free monthly webinar teaching millennials the very basics of mortgaging or homebuying/selling etc. They can tweet an industry fact every day. They can produce thought pieces or blog posts on their website regarding any of the new millennial homebuyer trends or fads mentioned earlier. They can host a weekly podcast tackling a different problem area that millennials face in the homebuying process. For example, 63% of millennial homebuyers experience buyers’ remorse, with the no 1 issue being ‘underestimating hidden costs’. Agents who are able to help educate this generation on these topics exhibit expertise, guidance, as well as transparency - another major priority for millennials today.
More than just the sale
Adopting some of these strategies might be costly and more easily implemented in larger firms, but many of these digital-first approaches are incredibly easy and affordable (if not completely free). It’s about agents creating and maximizing real customer lifetime value and proving to millennials - and themselves- that they are, in fact, future-ready.
For added insights on today’s homebuyers, see our blog post
The Changing Needs of Modern Consumers
As we become more digitally adept in our approach to almost everything, how are property buyers’ and sellers’ needs changing, and how can agents adapt?