In many markets today, homes are being snapped up almost as soon as they’re listed—and a large percentage of those buyers are entering the market for the first time. Here at Pacific Sotheby’s International Realty, not only do we see these trends, we’ve identified some key sources of anxiety that most new home buyers have in common. Here are the top five and how we help our clients cope.
- Paying—and overpaying
The number one concern we encounter with first-time homebuyers is price. Buyers are afraid of paying too much for a new property and using up all their savings. The vast majority have been on real estate websites and understand what’s normal for their market—yet when faced with the option to move forward, uncertainty kicks in and holds them back.
It’s important to sit down with a mortgage professional, educate your buyers on the different costs associated with homeownership, and ensure they’re pre-approved. We also ask our clients to draft a monthly budget based on their likely expenses. When they have tangible proof that yes, they can afford a home, and yes, the costs make sense, they find the confidence to put in an offer.
- Not landing the dream home
New buyers want their first home to be their dream home, and they can be discouraged when it doesn’t look like that will be the case. First homes are often limited by budget, but the main thing is that your clients will earn equity in the market, and can continue down the path to that dream home in the years ahead.
Help buyers see there’s no such thing as the perfect home: every listing will have lots of lovable perks and quirks that the buyer hadn’t even considered before. The search process is a great opportunity for buyers to figure out what they really want, and for agents to listen actively. Help your buyer get out there and see lots of options: let them know you have to kiss a lot of frogs if you want to find the fairytale ending.
- Missing out on opportunities
Competition can be intense in many markets, and new buyers are worried that the best opportunities may escape them. In the worst cases, this leads to inertia: the fear that they’ll never find the ideal property combined with the hope that their wishes could come true if they just wait a day or a week. This can leave buyers sitting on the fence forever.
As an agent, it’s your job to help your clients prepare for the disappointment of losing out on a bid without losing confidence. Many of today’s sales are multiple-offer situations, so make sure buyers have their pre-approval, proof of funds, and other requirements ready—along with an offer that truly shines.
- Finding issues with the house
When facing potential problems with a new house, first-time homebuyers fall into two camps: those that dread the thought of inspections and improvements, and those who can’t wait to gut the house like they’ve seen done on HGTV. For the first group, you can clearly lay out the reports they should read and how long they have to identify issues. For the would-be renovators, check that they’re aware of the investment of both time and money they’ll have to make.
If there are wishlist items your client didn’t get or upgrades they still desire, make that a part of your post-purchase celebration. We had buyers who really wanted ceiling fans in their main space, but the home they settled on didn’t have them—so instead of getting them a bottle of champagne, we surprised them with a gift card that would cover the cost.
- Understanding the process
The final source of anxiety for first-time homebuyers is the overall nervousness that comes with the end-to-end process of buying and owning a home. In California, we have to explain the Supplemental Property Tax Bill that comes after the close of escrow; in addition, we talk about home warranties and what they do and don’t cover, we discuss homeowner’s insurance, and, if they are purchasing in a neighborhood with a Homeowner’s Association, we advise our clients to read every page of the rules set by their HOA.
Empathy is critical: think back to your first deal and your worry that you would make a rookie mistake. First-time homebuyers are worried about making mistakes too. Many of these clients need extra support, and the best thing you can do is assure them that there’s no such thing as a stupid or silly question. If something isn’t clear, they should never be embarrassed to ask.
In the end, supporting first-time homebuyers comes down to being more than an agent and more than an advisor. You’re an advocate, a mentor, and a cheerleader, offering the knowledge clients need to succeed along with the excitement and optimism to believe in that success.
(As published by Inman)