Say what you want about Millennials, the generation born between the early 1980s and late 1990s. Some have called them lazy. Others say they’re too entitled. Let’s not forget the criticism Millennials got for moving back in with their parents after college graduation. They’re loaded in student debt that they’ll never be able to buy homes, people proclaimed.
Well, people were wrong. According to the 2015 TD Bank Mortgage Service Index, 50% of Millennials say they are either “extremely” or “very” likely to buy a house in the next year.
“They [might] have lower housing demand compared to parents,” but the sheer size of the demographic (92 million!) offsets Millennials’ lower overall homeownership rates, explains Hui Shan, vice president of credit strategy research with Goldman Sachs. “For each individual, their net demand is lower. But on a macro housing level, the quantity will make up for that decline in quality.”
Nela Richardson, the chief economist for Redfin, echoes that sentiment: “Millennials will have a huge impact on the housing market for the next decade, just because of demographics alone.”
Not only are Millennials buying houses—but the way they search for houses is already shaking up the real estate industry.
Millennials are the most tech-savvy generation yet. They grew up with cell phones and many of their classrooms came equipped with laptops (and later, iPad). They don’t remember a time without the Internet. Social plans are made through social media.
These habits are carrying over into their house hunt. Millennials don’t want to meet face-to-face with realtors. “We’re on our phones all the time, and this generation does not like to pick up the phone,” says Player Murray, a managing broker at Berkshire Hathaway in Raleigh, North Carolina.
Well, at least they don’t pick up their phones to chat. Millennials instead rely on texts, and data indicate that more than 50% of Millennials search for homes on their phones. Among those, 26% end up buying a home they found that way. Mobile traffic is easily outpacing foot traffic at local real estate agencies. If and when Millennials decide they want a realtor to join them to tour a house, they want to book those appointments online or through an app.
And despite all the talk about Millennials being lazy or unmotivated, they’re more likely than older generations to research properties on their own. They take time to evaluate market conditions, scour the Internet to compare listings to recent sales and create their own short-lists of properties without the input of an agent. They use online calculators to understand how big of a mortgage they can afford, and oftentimes get pre-approved for a mortgage without stepping foot into a bank.
With so many Millennials shopping for homes online, there’s a growing opportunity for homeowners to sell their properties online, too. With websites like JustClose.com, buyers and sellers are able to cut out the middleman to save on the commissions. After all, if buyers are using the Internet to find properties – why should you sellers pay an agent who only came in at the tail-end to coordinate the paperwork? Cost-conscious Millennials would rather have those savings passed on to them instead.
JustClose is proving a tremendous asset for sellers looking to list their property as a “For Sale By Owner’ (FSBO). Google FSBO and you’ll find plenty of articles about why listing FSBO is such a terrible idea – but note that most of these articles are posted on real estate agents’ websites! Of course, agents will try to convince you not to list FSBO because that means less business for them.
Consider this: one of the largest responsibilities of a listing agent is helping market a seller’s property. Agents rely on their networks to spread the word about new listings, advertise in local newspapers and distribute flyers around town. But that’s now how Millennials – today’s largest pool of buyers – finds properties.
In fact, in this red-hot real estate market, some sellers have found that just listing their property on MLS can lead to multiple offers within a day!
That’s why sellers are using JustClose to advertise directly to this tech-savvy group of buyers—rather than paying up for an agent to “market” their property. For a nominal fee, JustClose lists the property on the MLS network (something listing agents do for a steep commission), thereby making it broadly available to buyers who are already looking online, anyhow.
We aren’t saying real estate agents and other professionals should be cut out of the process altogether. Indeed, agents can prove valuable when negotiating on behalf of their clients, lawyers help button up paperwork and mortgage brokers match people with lending products that are most appropriate for their needs. Yet the cost of these professionals has traditionally been sky-high.
JustClose provides a new model for real estate transactions.
Unlike other FSBO listing sites that charge a nominal fee but no support, or discount brokers that charge thousands of dollars with limited support, JustClose has found a happy medium: buyers and sellers connect directly with each other, and can call upon a network of professionals as needed when needed. JustClose has a roster of real estate assistants that can help buyers and sellers navigate all of the requisite paperwork and move through the transaction process with diligence and knowledge.
As Millennials continue to redefine how people buy and sell homes, the opportunity to list as an FSBO will continue to grow. While the rest of the real estate industry rests on its laurels, JustClose is quickly adapting its technology to meet the needs of Millennial buyers and FSBO sellers alike.
Learn more about JustClose today!
By: Amanda Maher