How to guide first-time buyers through a particularly tough real estate market
By Kathleen Hagan
According to the National Association of REALTORS® 2020 Profile of Home Buyers and Sellers, first-time buyers made up 31% of all homebuyers in 2020, a 2% dip from 2019 and the lowest percentage since 1987.
The reasons behind this drop? Lack of inventory, high home prices and lack of financial leverage during the COVID-19 pandemic could all be factors. But if Congress passes a proposed first-time homebuyer tax credit, the number of first-time buyers may increase again in 2021, making the inventory shortage worse and driving up home prices even further.
So how can a CRS assist first-time buyers in a tough real estate market? Here are three areas to focus on when working with this special subset of buyers today.
1. Help bridge the gap between fantasy and reality.
According to Rich Sands, CRS, with Rich Sands Seminars in Aurora, Colorado, one of the biggest challenges of working with first-time buyers is resetting their expectations about the homebuying process and explaining the realities of the current market.
“When people go to buy their first home, they often have an idea in their head of what it’s going to be like,” he says. “But no matter the market and no matter how prepared the buyer is based on research or advice from family and friends, there is still this smack upside the head once they begin the process.”
The best way to bring first-time buyers back to Earth? Send them out to start looking at homes in person as soon as possible, Sands advises. “None of what you tell them means anything until they get out there and start seeing properties,” he says.
Mark Given, CRS, of Mark Given Seminars in Roanoke Rapids, North Carolina, says many first-time homebuyers have difficulty adjusting to the fast pace of today’s market. “Agents need to prepare buyers for the fact that they’ll need to be ready to move very quickly once they see something they like,” he says.
2. Don’t treat all first-time buyers the same.
In today’s low-inventory market where multiple offers are common, Sands emphasizes the importance of listening to buyers to understand their unique needs. “The agent who is going to be successful with first-time buyers is extremely patient and has excellent communication skills,” he says. “They are knowledgeable about their market and the process, so they can act as an educator, counselor and coach. They are also tech savvy, part psychic and part saint.”
“You need to understand your buyers individually and not just as a niche,” Given adds. “It’s such an emotional transaction, so you need to take their temperature regularly to see how they’re feeling, if they have questions and what their anxiety points are.”
3. Stay in touch.
After closing the sale, Given recommends sending regular updates about what’s going on in your real estate market and offering ideas and tips on how to maintain, improve and upgrade a home.
“Agents do their buyers a disservice if they don’t help them understand what happens after they close and how to take care of the property,” he says. “You should also share periodic market updates that show how their property is appreciating to help reinforce what a great decision they made in buying it.”
When you take the time to connect with and build relationships with first-time buyers, the results can be fruitful. “You never know when a buyer is going to refer you to their friends or family, or when you might get repeat business from them,” Given says.
Marketing to First-Time Buyers
Many of today’s first-time buyers are of the millennial and Gen Z generations, and the internet is often their first stop to find out more about the homebuying process. “But they’re not going to go to Google to search for a REALTOR® to help them,” says Rich Sands, CRS, with Rich Sands Seminars in Aurora, Colorado. “Instead they’re asking questions about the homebuying process, the real estate market and how to compete. The first-time buyer is going to be attracted to information—blogs, websites, social media, podcasts and videos.”
Agents who want to work with first-time buyers should make sure they offer this kind of content online. “That way, when first-time buyers ask these types of questions, they are more likely to find you via search,” Sands adds.
Mark Given, CRS, of Mark Given Seminars in Roanoke Rapids, North Carolina, suggests including testimonials from other first-time buyers on your website as another digital marketing strategy. “Today’s first-time buyers don’t care how many transactions you’ve done. Instead, they care much more about third-party testimonials,” he says.
Curious to learn more? Attend the Council’s eLearning on Working with First-Time Homebuyers at crs.com/learn.
Photo: iStock.com/akinbostanci
