In the final post of the series, REcolorado shares the story of a Millennial deciding whether to rent or buy rent or buy. Nikki Lindholm shares her experience as a first-time home buyer. She describes their situation renting a home, the pros and cons of renting vs. buying a home, and why they decided to buy their first home.
Millennials Speak Out!
According to Zillow Group’s Consumer Housing Trends Report, some 42 percent of those looking to buy a home are first-time homebuyers. Some 42 percent of those buyers are Millennials. With the Millennial generation being a dominant piece of the housing market puzzle, what makes them different from their older generation counterparts? Three of REAL Trends’ Millennial team members talk about their home-buying experiences. [Part 3 of 3 – Read Part 1 (New Construction) and Read Part 2 (Working with an Agent)]
Housing Experiences: Rent or Buy
Nikki Lindholm, 28, digital marketing strategist & social media manager
Married to Spencer
After what seemed like a lifetime of renting cramped, poorly lit, 700 to 900 square foot apartments, my husband and I began searching for our first home. To be honest, we weren’t sure if we were ready for a home. All we were sure about is that we needed more space. Prior to getting pre-approved, we talked about strategy.
If we couldn’t find a home that met all of our needs, we would continue to rent.
I think that is the same for a lot of Millennial home buyers. Many of us aren’t overly attached to the idea of owning a home for the sake of homeownership. We want a home that caters to our wants and needs. After all, renting can make life easier. You don’t need to worry about the costly issues that can come with owning a house.
When we began comparing what our mortgage would be against the cost of renting a larger townhome with a yard and garage, there wasn’t much of a difference. The one major gripe we had about renting was how much money we were spending on a property we didn’t own. Not wanting to ‘throw our money down the drain’ (as my parents have said over the years) started to make more sense.
Luckily, before I began working for REAL Trends, I worked for a large, independently owned brokerage in Iowa/Illinois called Ruhl & Ruhl Realtors. Although I was too young and broke from college debt to buy a home then, I learned how important it was to contact a real estate professional. Having worked with sales associates and managing brokers for just over three years, I would hear many horror stories of buyers who tried a ‘for sale by owner’ home or sellers who were trying to sell their home because paying an agent was “way too much money.”
I like to think that, if I didn’t come from a real estate background, I would still use a Realtor® during the home buying or selling process, but I’m not too sure. I believe that the Millennial generation has a higher mistrust against anyone trying to sell them on services. We are told and taught from an early age that you can learn anything you want on the internet. “Just watch it on YouTube,” is a popular slogan. And, we tend to be overly concerned with online reviews. The real estate industry has more recently come around to increasing their online presence but not at the pace that younger buyers are accustomed to, allowing national portals like Zillow to swoop in and fill that immediate void. To this day, brokers everywhere are trying to compete and make up for this advancement delay.
Before we decided on our real estate professional—the amazing Christine Gulley of Colorado Home Realty—we were exclusively searching for homes on Redfin.com and Realtor.com. The reason we used a portal over a local agency’s website is that we had just moved to the Denver metro area and had no idea what brokerages were around. Also, we liked searching on an interactive map. It helped us learn which neighborhoods were close to the areas we were looking in and helped us learn the area more easily. We continued to use these websites even after working with Christine because of the extra photo features they had. Our agent took care of everything and registered us to use a local portal that allowed us to approve or decline houses and write our comments to her about each house, which was great.
My husband and I joke that we are probably a bad representation of our generation. We didn’t want to live downtown, we wanted more space, and we didn’t need all the amenities an urban area provided. We needed a grocery store, a Target, and to be within 15 miles for our employers. I also think our generation is misunderstood when it comes to our wants and needs. Not all of us require beautiful industrial lofts that overlook downtown or heated floors throughout the home.
The biggest obstacle that brokerages have today is reaching and educating their younger audiences. The majority of future buyers are younger than 40. This shouldn’t be a demographic you ignore or mock for eating avocado toast (which is delicious FYI!) Millennials are getting things done. They are the generation to find and buy their home the fastest, and the generation that gets pre-approved the most frequently. I know I may seem biased considering I am a Millennial, but all we expect is the same knowledgeable information you would provide to our parents or grandparents. We just prefer electronic paperwork and virtual tours. And, we do enjoy getting information via phone calls and face-to-face meetings rather than texts.
My advice for brokers and agents is to be present on the sites and devices that this demographic is on and provide a mix of marketing approaches. If you think Millennials were needy with their instant expectations, you better sit down and prepare yourself for Generation Z, who are just starting to hit the market!
This article originally appeared in the November 2017 issue of the REAL Trends Newsletter is reprinted with permission of REAL Trends, Inc. Copyright 2017.