Crawling Inside The Head Of First-time Homebuyers

"No one cares how much you know, until they know how much you care." Theodore Roosevelt

It may be the most gratifying event of any Realtor's life - helping the first-time homebuyer find and buy a house. The excitement of successfully navigating the biggest purchase in life is palpable. Relief all rolled up into joy and exhilaration. When the American dream is fulfilled, it comes with a rainbow of breathtaking emotions.

If serving more first-time homebuyers is one of your goals for 2016, please keep reading. I have what I think will prove to be some helpful information and advice for you.

As you've likely heard, the generation of would-be first-time homebuyers -- the Millennials, those born in early 1980s to the early 2000s -- are not buying homes at the same rate as generations before them. In fact, the total share of first-time homebuyers declined for the third straight year in 2015. And just 30 percent of homebuyers in March were first-time buyers, well below the historical average.

Of course Realtors need to understand why this is. You not only have to understand the problem to solve it, you also need to know the mind-set of first-time homebuyers so you can meet them on their terms.

I'm sure old Teddy would agree, demonstrating that you understand where they are coming from is the perfect way to show you care. As it stands today, many analysts say first-time buyers are delaying homeownership for these reasons:

1. Rising home prices due to a shortage in supply.

2. Not able to afford a down payment due to relatively high rental-costs and educational debts.

3. Poor credit. Many young people haven't been able to build their credit or are battling low credit scores. A new study from Experian shows that many future first-time homebuyers, up to one third, report that they may not be able to buy a home because of their current low credit scores. In addition, nearly half have already decided to put off their first home purchase so that they can first work on improving their credit scores.

4. A general desire to be more stable before buying. A new survey from NeighborWorks America says 43 percent of first-time homebuyers want marriage and kids before a home. So where does this leave Realtors who need buyers?

The good news is 2016 is looking more favorable for first-time homebuyers.

- The National Association of Realtors says continued strong job growth and interest from potential young homebuyers will likely improve the number of first-time buyers this year.

- Interest rates remain low with average fixed rates well below 4 percent.

- First-time buyer programs, featuring low or no down payments, are up and running.

- The Experian study also reported that almost 75 percent of surveyed Millennials said they are trying to improve their credit scores. Their top methods are reducing their debt and making sure their bills are paid on time.

So, with all this in mind, my tips for serving first-timers as you move into the rest of 2016 are these:

1. Think smaller. Right now the low inventory is yielding multiple offers. You might encourage your first-timers to consider smaller homes and lot sizes, and perhaps lower-cost neighborhoods to increase their chances of getting their offers accepted.

2. Make it a project. Consider showing homes that need updating with some cosmetic upgrades and repairs that your buyers can turn into a renovation project.

3. See double. A duplex or a home with an apartment can give buyers the chance to cover their mortgage and at the same time save money by renting out one of the living spaces. This is a very economical alternative during a sellers' market. Thank you for your time and for reading this article.

Comments? Questions? Email Here

© HowtoAdvice.com

How to Advice .com