Young home buyers are more comfortable texting than talking, which means big changes for agents and lenders.
This article was commissioned by DitechMortgage Corp, Keller Williams Realty-Irvine, and Approved Real Estate Academy.
Both Tim Walsh, the Division Manager at Ditech Mortgage in Tustin, CA and Dale Cheema, the Broker of Record and Designated Officer for Keller Williams Realty – Irvine, know from their own experience as fathers of “millennial children” that they quickly had to learn a new way to speak to their sons. Dale Cheema remembers trying to call his son, Alex, with no results, so he sent his son a quick text and to his surprise got a quick answer back. Welcome to the new world.
What Tim and Dale are discovering is that while millennial homebuyers rely on technology, they still value face-to-face contact with an agent and lender.
For decades, the telephone has been the real estate agent’s tool of the trade, but a new wave of younger homebuyers is changing the way agents use those phones. Millennials, those born between 1980 and the late ’90s, don’t want to talk. They want texts.
“We’re on our phones all the time and this generation does not like to pick up the phone,” says George Chriest, Branch Manager at Ditech in Tustin. “They don’t want to bother with a conversation if it can be texted.”
As the millennial generation, also known as Generation Y, takes a greater role in the housing market, young people’s preferences are starting to shape the way real estate business is done. Dale Cheema predicts that his Keller Williams real estate portal, KW.com, will have more and more millennials and will overtake baby boomers as the generation purchasing the largest number of homes this year.
“Because of their size, whatever they decide to do will have an impact on the housing market,” says Jim Forde, Director of Approved Real Estate Academy in Irvine. Forde is now the leading trainer of new Millennial Agents that want to get into the real estate business. Forde is advisor to Keller Williams Realty, Ditech Mortgage, and the Real Estate License trainer for Diamond Resorts International.
It goes without saying that this group relies on technology. According to data from the National Association of Realtors, more than 50 percent of millennials search for homes on their phones, and among those, 26 percent end up buying a home they found that way.
“Mobile traffic to our app has outpaced traffic to our desktop site dramatically,” says Dale Cheema, “Folks first go to their iPhones and their iPads.”
Dealing with these tech-savvy buyers has posed a challenge for the nation’s real estate Agents who are considerably older than the home buying population they serve. A NAR survey of its members in 2012 found that only 3 percent of agents were under 30 and 81 percent were older than 45 of which 25 percent were over 65. This is a problem that Jim Forde hopes to solve by spending most of his time talking to students at universities in Southern California.
“We’re seeing a population on the consumer side that is not being served by its own age group,” Forde says. “It’s causing a significant change in the way experienced agents are having to communicate.” At Approved Real Estate Academy we teach the basics, but have added new sections on how to “communicate” to different groups.
To meet the needs of Millennials, Jim Forde creates groups of young agents in Southern California to help Diamond Resorts International, Keller Williams, and Ditech meet the needs of younger customers and recruit young agents. We do this, said Forde, since many millennials had a negative image of real estate agents and loan officers. When we show them the technology and have them meet similar-age agents they quickly see the endless possibilities and sign up for our school.
“Millennials are driving change in a lot of industries,” Forde says. “They’re making these industries revisit some traditional practices.”
Keller Williams Realty is an example of a company that has changed some of the traditional ways real estate is bought and sold, with technology taking a key role. Customers can ask for home tours online or via the company’s app, as well as sign up for alerts about new listings. They can use their phones to search for open houses near them. The KW.com app lets customers keep tabs on the process of their transactions 24/7.
“We find that our buyers, and particularly millennials, like having that information at their fingertips,” Cheema says.
Both Ditech and Keller Williams Realty have found that customers still value face to face contact with an agent. Predictions that technology would make agents obsolete have proved unfounded.
“Agents are needed because they are that trusted resource when it comes to signing a contract,” Cheema says. “If you are on your own, it can be overwhelming. It would be a second job.”
Both Tim Walsh of Ditech and Dale Cheema of Keller Williams see the following ways millennials are changing real estate:
Don’t call us and we won’t call you. Many millennials prefer to communicate by text, but some prefer email. It’s important for agents and customers to clarify up front how they will communicate and how often, as well as how quickly they can expect a response.
We’ve done our homework. Millennials rarely need agents to find homes for them to see. They usually have their own list, and they’ve already researched comparable sales and chosen a neighborhood. “With millennials, we do not control information,” Walsh says. “What they need is for us to interpret the information.” At times, that can mean demonstrating that the information is not accurate. This generation may not simply take the agent’s word without proof and visuals.
We don’t like surprises. Younger buyers want to know what to expect and when. “I see them wanting to understand what’s going on at any time in the process more than any other generation,” Cheema says. They like timelines, checklists, and charts. “If they don’t know what’s coming around the corner, it could cause paralysis when they get to the next step,” Walsh of Ditech says he sees this every day.
We want customer service and we want it now. Millennials expect to be partners in the home search and they want quick answers to questions. “They want information – valid information – and they want it right now,” Walsh says. “They’re the generation of Google at your fingertips.”
Is there an app for that? Younger buyers live on their smartphones and use them as a key tool in their home searches. Apps are often their preferred method to check listings and collect other information.
For more information on Millennial Agents contact:
Broker of Record and Designated Officer
Keller Williams Realty – Irvine
Jim Forde Director
Approved Real Estate Academy
Real Estate Agent Trainer
Diamond Resorts International