Tips for Selling Your Home to Millennials
Millennials, those born between 1980 and 1995, are expected to surpass baby boomers and Generation X to become the generation buying the most homes in 2015, according to real estate website Zillow.i
In 2012, millennials made up 28 percent of the U.S. housing market. That rose to 32 percent in 2014. Rising rent prices – and the knowledge that interest rates will likely soon be rising – are driving even more of those in their 20s and early 30s to consider home-buying instead, with more than 5 million renters expected to purchase a house in 2015.ii
Adding to the momentum is an improving economy and job market. The unemployment rate for 25- to 34-year-olds fell to just over 5 percent in February 2015, which is nearly half the rate in October 2009.
Not to mention, millennials, which number about 75 million in the United States, are expected to outnumber baby boomers for the first time in 2015,iii and the oldest millenials are in their mid 30s – an age when many are thinking about purchasing their first (or even second) home… as many are becoming financially affluent at very young ages. As reported by the LA Times earlier this year:iv
“Statistical measures and anecdotal reports suggest that young couples and singles in their late 20s and early 30s have begun making a belated entry into the home-buying market, pushed by mortgage rates in the mid-3% range, government efforts to ease credit requirements and deep frustrations at having to pay rising rents without creating equity.”
Tech-Savvy Millennials are Changing the Way Even Experienced Real Estate Agents Work
Younger homebuyers are changing the real estate market in more ways than one, starting with challenging agents’ long-held go-to tool: the phone call. Millennials typically much prefer texting over talking. Player Murray, managing broker at Berkshire Hathaway HomeServices York Simpson Underwood Realty in Raleigh, North Carolina, told U.S. News & World Report:v
“We’re on our phones all the time, and this generation does not like to pick up the phone … They don’t want to bother with a conversation if it can be texted.”
Texting can be used in place of phone calls or to alert clients to open houses, price changes on properties they’re interested in, or quickly share other pertinent information. It’s a more rapid form of communication that requires less agent interface, although millennials do appreciate face-to-face time with their real estate agent as well.
A survey conducted by the National Association of Realtors (NAR) found that millennials are most likely to use a real estate agent.vi Although, they’ve often done their homework well before they contact you …
Millennials Use Their Phones and Tablets to Home Search
Millennials are the generation most likely to use mobile phone and tablet apps, as well as phone and tablet search engines, during their home search, according to NAR. More than half of millennials found the home they purchased online, and 90 percent then used a real estate agent to buy their home.
Millennials clearly want access to dozens of house pictures online (versus a few pictures in a glossy paper brochure). And they’ve typically researched heavily online before deciding on a house to see. Millennials will usually come to you with a list of houses to see, and they’ve often researched comparables ahead of time.
They’ve researched neighborhoods, schools and proximity to their jobs, and are expecting the houses they see to look as good as (or better than) they do online. They like to gather information quickly online, and they want their Relator® to be their accessiblea expert partner in the entire home-buying process.
What Do Millennials Want in a Home?
An analysis conducted by Redfin revealed that, perhaps first and foremost, millennials like to be close to the action, in proximity to transportation, work, coffee shops, restaurants, safe jogging trails, schools and shops. At least when they’re renting.
While most home purchases (across all generations) are in suburban areas, according to NAR, it’s likely that millennials will prefer to settle down in areas that at least offer some of these perks, with “walkability” to markets and coffee shops, even in a more suburban area.vii
They’re also looking for neighborhoods with good schools, with more than half saying the quality of a school district could be a deal breaker in their home search.viii As for the house itself, millennials are looking for a much more updated, open and informal living space than generations before them. Designer Chad Graci of Graci Interiors in New Orleans told Realtor Magazine:ix
“Preconceived notions about what is correct have been shaken and stirred, and the boundary between formal versus informal seems less important to them.”
So what are some key features millennials want?
- Technologically advanced (able to control lighting, thermostat, audio system, etc. with a tablet or mobile phone)
- Modern designs with open floor plans, including a large great room or open kitchen/family room concept for entertaining and family living
- “Functionality” is the key operative word. Imagine a glass room off the primary open living space that is virtually “sound proof.” A Place where children can be seen for years to come practicing their musical instruments for hours. Seen but not heard. Enjoyed without the annoying repetition of them play repetitiously the same notes. Allowing the entire family and visitors to carry on normal conversations.
- Their parents’ homes only with functional features and simplicity.
- Energy efficient homes and built sustainably (renewable materials such as bamboo, reclaimed wood, low-VOC paints, etc.)
- What’s Out? Traditional dining rooms and living rooms are not important
- Hardwood floors are preferred over carpet
- Media room or a finished “man cave” basement
- Walls with color (or even one bold wall)
- Open multifunctional spaces, such as an office and exercise room
- Romantic master bathroom and bedroom suite that is private yet not too far from children’s bedrooms
- “Shared-space” or rental space with separate entrance (AIRBNB is a big deal to many Millennials who love the concept of having this option. In comparison Babyboomers and X Generation see renting out a room or area of their homes to strangers as being odd or “weird” with obvious safety concerns, unless to their inlaws or family)
- Functional office, as many millennials work from home
- New higher-end appliances (many millennials have a limited budget and won’t be able to afford appliance replacements right away)
- Move-in ready. MP Studio designer Allison Endres told Realtor Magazine:x
“The more the seller has done, the better, so the buyer doesn’t have to spend time making changes … A real estate salesperson would do well catching millennial buyers’ attention by guiding them on how to use a house through staging that piques their interest”
For instance, you might transform a dining room into a home office or a living room into a media room.
Know Their Motivation…
For most millennials, their motivation is simple: a desire to own their own home. In their “Field Guide to Millennial Home Buyers,” NAR points out that 24 percent in this group are repeat home buyers, many are upsizing, and 6 percent purchased a multi-generational home (which consists of adult siblings, adult children, parents and/or grandparents).xi
Remember that regular communication (likely by text or email) and access to information – and fast – is key for this generation used to having the world at their fingertips. And be sure to be familiar with homes’ Internet and cell service capabilities, both of which are highly important to millennials.
And perhaps most important of all, be aware of how the house appears online. Many professional photos (lots and LOTS of photos, each room shot from different perspectives, and panoramic photos) showing bright, natural light and modern, updated spaces will draw in millennials that otherwise might never step foot in the home.
Keep in mind, when a potential buyer is coming to view your home it’s a good opportunity to go out for a cup of coffee. You don’t want to be around when your home is being shown, as this can make the potential buyers uncomfortable. You want them to imagine the home as their own, which is much easier to do without the current owners lingering.
Finally, let your realtor be your advocate. He or she can answer any questions you have as well as negotiate on your behalf. Together, you and your realtor can make selling your home a quick and easy process.