Owning a home is still an American dream. Regardless of what has happened in the last 10 years with the real estate bubble and subsequent financial crisis, Americans still dream of owning their own home. For first-time homebuyers, that dream is especially alive and well. It is a purchase that comes fueled with emotions, ranging from trepidation to outright joy. However, first-time homebuyers can be a challenge for some real estate professionals. Putting dreams and enthusiasm aside, they can also let their lack of knowledge of the market, outside opinions, or even just nerves get in the way of the buying process.
At present, this particular group of homebuyers makes up 32 percent of the home buying market. They are vital to the real estate industry even if they can be a little frustrating or time consuming. So how can you take charge of these challenges and successfully work with this large segment of buyers?
Lack of knowledge: First-time buyers are just that—first-time. They may have done some research online and gathered information from friends or relatives, but at the end of the day they are real estate neophytes. This is a great opportunity for you to not only educate your buyers on the best and most decisive information, but to also show off how much you know and create a solid relationship.
- Educate them: Before you see the first house, sit down with your client and educate them on everything. The market, the area, the buying process—all of it. Leave nothing out. Keep it to one hour or less in your office and provide information they can take home with them. The education process will reveal to you how much they know, give you more insight into what they are looking for, and create a stronger working relationship with your client. Everyone wins.
Parents or outside opinions: Many first-time homebuyers are eager to ask their parents, friends or relatives for advice when it comes time to buy their first home. While some realtors may find this to be extremely negative and counterproductive to the sale, others who are more adept at working with first-time homebuyers know to embrace it. New homebuyers trust the people in their lives they have sought out for second opinions. It is only natural that they include them in the process. Some of these outside influences may be contributing to the down payment or other financial aspects regarding the sale. So what can you do to leverage these extra voices?
- Include them! Yes, they will be more vocal about problems with the house. Yes, they may try to show off how much they know about the market. Don’t try to silence or exclude them from the conversation. Let them say what they need to say and get them on your side. The last thing you want is for them to suggest to your buyers that they need to find a new realtor.
- Lead the conversation: Outside voices may sometimes state incorrect information. Respectfully correct them and make sure to follow up a second time with your buyers to reiterate the correct info.
Everyone you come in contact with is a possible future client. If you are working with the children, that indicates that the parents likely do not have a relationship with a real estate professional. Treating them with respect and keeping them informed and part of the decision making process helps to build your relationship with them. This can pay dividends later.
Indecisive: Indecisiveness is a common occurrence with first-time buyers. They may be overwhelmed with information or scared to commit to purchase. You can take control of this in the beginning of the buying process when you are armed with the right information.
- The All-Knowing Questionnaire: Have your buyers fill out a full, all-encompassing questionnaire. It should include lists of what they have to have, can live without, and would like to avoid. Include questions about school districts, commutes, even landscaping. The pen to paper approach can be much more beneficial for both you and them because it will force them to stop, think, and really commit to paper what they are truly looking for. Make a copy of the completed questionnaire for them to keep so that they can refer to it throughout the process and make changes if need be.
- Set a time frame: When you first sit down with your clients, set a time frame. Show them what is going on with the market, what the projected rates are, and talk to them about what time of year will make the most sense for a move. Discuss what it will take to break their lease if they have one. By setting a time frame, you are creating a loose deadline for them to strive to adhere to.
- Don’t be afraid to lay down the law: Sometimes you have to be firm with first-time homebuyers. You cannot look at houses forever, and if you feel as if that is where you are headed, then it is time for a firm conversation. Ask them if their needs have changed, if the timeline wasn’t reasonable, or straight out ask them what it is they need in order to commit to a purchase.
Remember that you are setting up a relationship that could last years. Their first purchase with you may not be their last. Embrace the role of guide and educator through their first home buying experience and you will be setting yourself for a successful experience for all parties involved.