Updated: Nov 29, 2022
by Miriam Moore, www.svclnk.com
Millennial parents looking for a home to buy are faced with an intimidating housing market that’s squeezing them from several sides: boomers are buying starter homes as second homes, housing is scarce, and higher prices due to low mortgage rates and an exodus from cities to suburbs. In addition, from a survey released in February by Fannie Mae, only 25% of respondents said it’s a good time to buy a home.
All of that doesn’t exactly add up to much encouragement for millennial parents who want to become first-time homebuyers by the end of the year. But the savviest in this demographic can overcome the challenges and take the homeownership leap. To do so, they should use these four tips, which cover overlooked and vital areas.
Tip #1: Search unexpected supply
Since pricing is so crucial to the home shopping process, it’s important to remember the law of supply and demand. So, to find a house within budget, you need to tap into home inventory where fewer people are looking. Find the supply with the least demand, in other words.
An emerging method for accomplishing this strategy is buying a home at auction, which is an overlooked entry point into the market. A recent ServiceLink study found that 28% of U.S. consumers are unaware that you can buy a home at auction at all. The advantage of auction shopping is that it’s a faster buying process with potentially lower prices.
Increasingly, auctions are online and allow home buyers to bid on more properties in their desired locale from wherever shoppers happen to be situated. If you have a work trip to London, you can still buy a home that’s going to be auctioned in Las Vegas while you are overseas.
Right now, online auction buying is a bit like a trade secret. But it will likely become more mainstream soon: In fact, 42% of all consumers and 55% of tech-savvy millennials are open to using online bidding tools, according to the same survey.
The option of online auction buying underscores how the real estate industry is digitally transforming because home sales traditionally took place in person. [MM1] Now, technology is opening it up to remote buyers through apps and desktop bidding capabilities, helping them search and find homes wherever they are looking to buy.
Tip #2. Get to know digital tools
The future of buying is online, and millennial parents who are home shopping need to embrace smart technology to get ahead and expedite the buying process. The pandemic quickly accelerated the adoption of real estate applications that make virtual shopping possible. Here’s a list of developments beyond online auctions, which have been addressed:
Virtual home tours became normal.
Full neighborhoods can be explored by online videos shot by drones.
Realtor chatbots can supplant rudimentary discussions over the phone.
Repetitive paperwork can be switched out for e-signing apps.
Mortgage financing and some appraisals and inspections can all be handled remotely
And closing on a residential property—which historically has meant multiple lawyers in a room with the buyer and a mound of paperwork to be signed—can now even be accomplished virtually.
This confluence of technological advances is still in the “early adopters” stage. But they represent the future of home shopping, and millennials should wield ideas such as virtual home tours, drone-shot videos, and chatbots to discover their future home because others in the market won’t. Then, they should be aware of the digital tools available for the later stages of the process to make their lives easier.
Tip #3. Discover real estate’s social side
While millennials already use social media for buying clothing and shoes, they should also employ TikTok, YouTube, Facebook, etc. for home shopping. They need to follow credible social media experts who can help them learn the fundamentals of real estate, brush up on industry basics and find a place. To get a sense of what’s on the market, they should follow real estate agents in their area and follow auction sites to find the latest auction homes.
Further, individual real estate players are finding their calling as “Tik Tok agents.” Truly, this industry is being socialized, and millennials should harness information from those channels.
Tip #4. Don’t rush
First of all, be tactical, not emotional. A competitive housing market can lead to irrational decisions. Therefore, safeguard against the ups and downs of home shopping by keeping pros and cons lists. This tip is important no matter what your generation, but especially with millennials—who are known as more impulsive shoppers.
Too many home shoppers spend months looking before making a kind of purchase that can almost be characterized as an impulse buy due to the fatigue of searching StreetEasy or scanning QR codes on For Sale signs. Don’t be like that. Keep your pros/cons list nearby, and don’t rush.
Indeed, home shopping is a process that takes time. The good news for millennial parents is that they can have the upper hand on other home buyers if they search for online auction inventory, use digital tools and maintain their north star along the way. Before they know it, they’ll be e-signing paperwork and popping a bottle of champagne with a Realtor over a Zoom call.
About the author:
Miriam Moore is the president of Default Services at ServiceLink, a provider of transaction services to the mortgage and finance industries.