First-time homebuyers make up a distinct portion of the real estate market, but their unique needs can make helping them find a home challenging. Often, first-timers are younger than the average buyer. They don’t always know a lot about the homebuying process. Their inexperience, coupled with the sheer volume of logistics related to homebuying, can overwhelm fast.
To serve first-time homebuyers best, you need to anticipate their specific needs by understanding them better as a group. Here’s what you should know about those making their first foray into home ownership.
The profile of a first-time homebuyer
The majority of first-time homebuyers fit into a range of demographic data. Almost two-thirds are under 35 and are usually house hunting as a couple. They generally have lower incomes than those looking for a second or third home. About 77 percent of first-time homebuyers previously rented, so they’re not necessarily new to living on their own. This is still a big step to take though.
What they want
Serving up the proper searches for first-time homebuyers is a great way to ingratiate yourself to them as their agent. However, they might not know exactly what they want. Start by listening to them describe their ideal place. Ask what their primary concerns are as well. If working with a young couple, ask them to think about whether they might have children in this home (for school districts.)
Through getting to know them and what they envision in a home, you can help improve their search. Narrow down neighborhoods for them and make more deliberate choices in which home listings to share.
It’s also worth noting that even if a first-time homebuyer isn’t sure what type of home they want, the majority are looking for single-family. According to The Washington Post, 83 percent of first-time homebuyers want an actual house. Only five percent prefer townhomes, and another five percent want a condo. The slight percentage leftover are looking for a place that’s unconventional.
Even from the start of a home search, first-time homebuyers are going to have a ton of questions. While the answers may feel obvious to you, and a lot of responses will be common sense, your buyers are looking to you as the expert.
As you establish your client-agent relationship, make sure to take each question seriously. Respond with concise and informed answers. This can help relax your buyers and establish trust.
What they can afford
Narrowing down the perfect home is only one area where first-time homebuyers need significant help. Finances are the second. They can struggle with understanding what they can afford. They also may not know a lot about loans.
By understanding the variety of loan programs geared toward first-time homebuyers, you can prove a great resource when it comes to financing. Take some time to get familiar with these types of programs in your area. While researching, consider making a cheat sheet for newbies. Define important loan terms like fixed-rate and adjustable-rate, and include a list of loan resources.
Don’t forget to mention any financial perks first-timers can get from buying a home. Explaining mortgage deductions, property tax deductions, exemptions, and exclusions will not only entice first-time homebuyers to stick with the process, but it can help them budget better. This is especially true if they know they’re getting money back (or paying less) at the end of the process.
How buying a home really works
Once you’ve helped your buyers find a first home they love and can afford, your next job is to walk them through the entire purchasing process. This starts with the initial offer. An inexperienced buyer may want to make rash choices that could scare away a seller. Advise your buyers to not go too low in their offer, and to be ready to negotiate.
Making suggestions throughout the purchasing process can help your buyers get the best price possible. They're also able to approach the sale with more realistic expectations.
After the home goes under contract, make sure your buyers understand what has to happen for the home inspection, and how due diligence works. If you can accompany them on the home inspection, even better. You already know what issues are okay to overlook, which to ask the seller to fix, and which are enough to walk away. Your first-timer won’t. Again, it’s your suggestions that will help them feel more secure in the sale.
On closing day, your role is mostly to nod and serve as a calming influence. This day is all about signing papers; so many papers. However, the time spent sitting at the long table is a common time for first-time homebuyers to get nervous. It may suddenly hit them how much money is being spent, how many years it will take to pay it off. Doubt can creep in unless you’re there to reassure them they’ve got this, and this is a good choice.
Reminding them, each step of the way, that, “this is all normal,” as you ensure they’re doing everything right, can save first-time homebuyers from a lot of undue stress.
When it’s all over
Finishing the process of buying their first home is a huge step in anyone’s life. As their agent, you’ve been the biggest supporter during this process. Don’t forget to celebrate the moment with them.
Bring a little card and/or token of your appreciation to the closing to give as a gift once your buyers finish signing everything. As they hold their keys in hand, remind them now is the time to relax, the house is theirs.
Going the extra mile, even at the end of the home buying process, can solidify you as their agent and friend. When they’re ready to move out of their starter home, most likely in just a few years, you’ll be the first person they call.