A Guide to Working With First-Time Home Buyers

Buying a home is exciting. It is easy for buyers to be distracted by all the things they want and to overlook many aspects of the home buying process that are important. For the mortgage company, it is all business. They make sure they are protected by things like title insurance. First-time buyers want the most home they can afford. Sometimes, they pursue more than they can comfortably afford. Without proper guidance and counsel from a knowledgeable REALTOR, these novice buyers will skip on procedures such as home inspections by a third-party professional and their own title insurance policy to try and cut their costs.

Connectivity increases vulnerability

The National Association of REALTORS states in their "Real Estate in a Digital Age" report that 68 percent of first-time buyers are Millennials between the ages of 25 and 35. They make a decent living with an average income of $84,500. Many of them witnessed the housing market collapse and have seen their parents struggle to keep a roof over their family's head. Many of these young buyers have opted to pay down their college debt before they even consider buying a home. They are connected to one another and an infinite source of information on all things (the web) practically 24 hours a day and 7 days a week. However, these accomplished and knowledgeable buyers are vulnerable in many ways. A study by Wombat Security Technologies found that young people 18 to 25 are more vulnerable to phishing attacks because they are so open to provide personal information if they believe doing so will provide additional convenience.

Working with first-time buyers requires tact

It is important to reach and work with all first-time buyers in a way they are comfortable without allowing them to make costly mistakes. These novice buyers think they know more than they actually do. Just as they are more likely to fall for phishing scams, the information they gain from doing their own research online may not be from credible sources. For example, they may stumble across a blog that advises them against purchasing their own title insurance policy because they are already paying for a policy for the mortgage company. But that is not enough to protect the home buyer's investment. Agents must be a resource of reliable information without being condescending.

Really listen and understand their priorities

Far too often, real estate agents fall into a pattern of just going through the motions. Each transaction begins to look the same, and the agent tries to do too much of the decision making for the home buyer because they think they know what is best. It is true that many first-time buyers do not have any understanding of the process, but the agent still works for them and in their best interest. Just because many new home buyers in the market are gravitating to a specific area, price range, or style, that does not mean it is right for every buyer. It is just as important to gather the right information from your buyer as it is to provide them with information.

Be clear about your role upfront

Some first-time buyers do not understand the value of REALTORS. They think agents make a lot of money without actually doing much work. Establish yourself as a resource early in in the relationship, but make sure they understand what you can and can't do. Be sure to provide them with an agency agreement and have them sign a document that explains the different types of agency relationships. Some agents avoid having uncomfortable conversations because they think it might scare potential clients away. It is better to thoroughly discuss the value you bring to them and how you are compensated early, rather than have lingering misunderstandings and conflict down the road.

Taking the time to nurture relationships with first-time buyers is challenging, but also rewarding. Just as many home buyers overlook the value of title insurance, many real estate agents choose to not invest in working with first-time buyers. Title insurance is important to protect a home buyer's investment. Working with first-time buyers is important to have future referrals and a balanced real estate business.