Did you get into real estate to make less per-hour than you can make at a minimum wage job? If so, keep focusing your efforts on first-time real estate buyers.
If not, read on.
First-time real estate buyers aren’t all that
Take a tour around the web and you’ll find tons of articles (18,200,000 to be exact) geared to first-time real estate buyers. How to buy, when to buy, how to save for the down payment.
It’s as if there are no other homebuyers
Why are you chasing after first-time real estate buyers? Because (or so we learn on so many agents’ blogs) they are the largest share of homebuyers?
That simply isn’t true.
First-timers make up only 35 percent of the buying pool, according to the NAR. Not only is this particular lead pool small, those in it are hard to work with, have unrealistic expectations and are almost guaranteed to be a total time suck.
By the way, we did the math for you: 65% of homebuyers are repeat buyers
So, again, why are you putting yourself through this?
Don’t be like this guy
There’s a hilariously pathetic article on realtor.com about how agents can find starter homes for first-time real estate buyers. The suggested tactics included “Dredge up the inventory yourself,” and “find creative financing solutions.”
Then, there are the articles that teach agents how to help first timers overcome their reluctance, fear, etc.
Can you hear that sucking sound? That’s yet more of your time
Why not use the exorbitant amount of time that you’d spend on ONE first-time buyer to instead pursue move-up buyers who don’t need inventory dredged up for them, don’t need to learn about the mortgage process, don’t need their hands held AND have a home to sell?
Repeat buyers are the key to winning the stay-alive-in-real estate game
The old saying that if you list, you last, is still largely true. But, if you simply must be a buyers’ agent, be an efficient, money-generating buyers’ agent. Don’t GIVE your time away to first-time real estate buyers.
How to attract repeat buyers
I got a Target gift card in the mail recently, from my attorney. I referred a friend to him and he was grateful.
My referral to my friend was because he is an amazing lawyer, but you can be sure that the gift card will have me referring him in the future. He actually appreciates his clientele. Rare in a lawyer—at least the ones I’m familiar with.
When I bought a home, my lender offered me a gift card if I’d leave a review about him on Yelp. Not only will this solicitation get him banned from Yelp (I won’t tell on him, but others might), I just don’t have the time to write for free.
Yet, I’ve referred three people to him. All of them bought homes with a mortgage he helped them get. I asked each of them if they told him that I referred them. They, indeed, did.
I didn’t even get a thank-you email
Think I’ll ever refer friends to him again? I don’t know. Probably not. He’s not very grateful.
All of this is a rather long-winded way of reminding you to show your past clients who refer you to others some love. These people are A-Listers and they’ll keep referring to you if they know how much you appreciate their efforts.
Use your website
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Make your site the go-to resource for repeat homeowners. This is the pool in which your repeat buyers swim. If they’re visiting your website, they’re not just homeowners, they’re homeowners considering buying another home (and selling the current home).
Your content, if done right, will help lure them in and keep them coming back. From special sections to blog posts, here are some examples of information repeat buyers will find valuable:
- Should I sell or buy first?
- Explain the bridge loan and how to get one
- What your market is like right now for larger homes
- How to upsize, downsize
- New home communities in your area that are ideal for move-up buyers
Of course, it’s always wise to know your audience before sitting down to put fingers to keyboard.
Think “older” when considering your website content. Ditch the millennial pieces and aim for Gen X and Boomers. Roughly 66 percent of homebuyers are older than 36.
Know your target audience
Boomers are a bit scattered in their desires right now, with a bunch of them saying they’ll rent after selling, another bunch wanting to upsize and, yes, some want to downsize.
A lot of them, however, haven’t bought or sold a home in a very long time, so sprinkle in some information for boomers on how the process has changed over the years. They also want walkable neighborhoods and those filled with or close to amenities they crave.
Many Gen Xers still have kids at home, so keep that in mind as well. Plenty of them are seeking homes in excess of 2,300 square feet (according to a large home builder’s study), located in the suburbs.
Best of all? They tend to do copious research before even looking at homes so their learning curve will be far less intensive on your part.
Your non-real estate-related posts can include information on local schools, things for families to do in their leisure time and date night ideas for Mom and Dad to get a break from parenting.
Finally, understand that both generations typically won’t need advice on down payments.
More than half of them, according to NAR, used the proceeds from the sale of their current homes. So, aim your content to how they might go about getting at that equity when they want to buy a home before selling and explain jumbo and bridge loans.
Drip on your leads with appropriate content
Direct mail is still an effective way of reaching prospects. Consider farming areas with a significant number of long-time homeowners.
Let them know how much equity they’ve gained since the market crash, especially if they own a starter home
“Owners of starter homes have gained 44 percent in equity over the past five years,” according to a Zillow study. And, if you work in Seattle or the San Francisco Bay Area you probably know that higher-priced homes are regaining their value faster than starter homes.
Overall, “housing equity now equals 58% of home values — the highest point since 2006,” according to the Associated Press’ Christopher S. Rugaber.
This is information homeowners need to help get them off the fence about selling
They’re afraid they don’t have the equity to buy another home. They’re also unsure that they’ll be able to sell their current home before buying the next one. Thank the media for that.
Show them — tell them — that they’re in the driver’s seat right now and warn them that no sellers’ market lasts forever.
Stop wasting time and energy on the young’uns and gear your business to repeat buyers. You won’t be sorry.
Owner & Operator,
The Elite Group
Largest Home Inspection Company in North America
Best Selling Author “Secrets Of Top Producing Real Estate Agents: And How To Duplicate Their Success.”