The advent of technology is predominantly responsible for the current shape of the real estate landscape, or at least how it operates. That said, I am convinced that those who are fully committed to adopting the latest technological trends are in the best position to capitalize on opportunities that arise in the real estate industry.
There isn’t a generation more prepared to harness the power of technological advancements than millennials. Having been exposed to more technology at a younger age, it is only natural that younger homebuyers are more inclined to lean on it in their respective home searches than older generations.
Let’s take a closer look at how technology has shaped the way millennials research, shop and close on their first homes:
It has never been easier to research a respective property than it is today, and one thing in particular has more to do with making research accessible to everyone than everything else combined: the Internet. Not surprisingly, online platforms and real estate valuation tools have left millennials more informed in their own home searches than the generations that have come before them. With just a few clicks of a mouse and a little ingenuity, it is entirely possible for prospective homebuyers to compile a list of viable homes that meet their criteria.
According to the National Association of Realtor’s latest Profile of Home Buyers and Sellers, 94 percent of millennials used online portals in their home search last year. Today, those home searches have transcended desktop searches, and now take place on mobile devices. In fact, more than half of younger buyers preferred to search for their first home on a mobile phone or tablet. Of those surveyed by the NAR, 31 percent of millennials and 26 percent of Gen Xers ended up purchasing the home they found on their mobile device.
Of particular importance, however, is the difference in volume and time spent searching for a home between those that used the Internet and those that didn’t. According data released by the NAR, buyers who used the Internet last year spent twice as long searching for a home and saw twice as many houses than those that neglected to use online tools.
If for nothing else, new technology within the real estate sector has awarded millennials the opportunity to make more informed decisions. All the information they need on a property is just one click away. Moreover, they no longer have to settle for the houses brought to them by a single real estate agent. They essentially have a much wider pool of properties to choose from, and can therefore be more selective in their search process.
First-time buyers will have a better chance finding a home they can afford today than they have in the past. With access to the MLS, online valuation tools, and even mobile applications, millennials have every reason to shop within their means.
Speaking of a wider pool, more refined search results will also benefit those in search of a loan. Outside of finding the right home, the Internet has made the mortgage process itself more accessible to those who may not understand it entirely. It’s much more likely that millennials will turn to the Internet to help them find the right mortgage for their current situation.
No longer are first-time homebuyers expected to walk into a bank and accept the lending terms of the closest traditional institution. Not unlike their home search, they can shop around for the mortgage that best suits their needs.
First-time homebuyers have the added benefit of being able to reference pages like the Consumer Financial Protection Bureau, which exists specifically to help those who may have questions about the home buying process. Subsequently, the U.S. Department of Housing and Urban Development offers first-time homebuyers a step-by-step blueprint and even determines how much home they can afford.
Armed with a better knowledge of how mortgages work, millennials are less likely to take on monthly premiums they can’t afford, which, I am sure I don’t need to remind you, contributed to the Great Recession nearly a decade ago.
Above all else, new technology within the real estate sector has awarded first-time homebuyers the opportunity to make more informed decisions. There may have never been another generation more prepared to actively participate in the housing sector than millennials, which bodes well for real estate and the economy as a whole.
I want to make it abundantly clear; just because millennials are more inclined to use technology in the search for their first home, it doesn’t mean real estate agents will be relegated to the wayside. In fact, real estate agents are more relevant than ever. According to the NAR’s Profile of Home Buyers and Sellers, 87 percent of buyers in 2015 purchased their home through a real estate agent or broker, and millennials are no exception. While today’s first-time homebuyers may not need an agent to begin their search, there is a good chance they will need help interpreting the information they are presented with; someone to confirm what they read online.
Consequently, technology has also changed the way first-time homebuyers interact with real estate agents. Instead of your typical phone call, it isn’t uncommon for most conversations to take place via text or email. First-time homebuyers, for that matter, tend to place a priority on those agents who can answer their questions fast and reliably.
As millennials quietly start to represent the largest pool of buyers in America, their preferences will start to shape the way real estate business is done. Those who become early adopters of the technology they use should be able to capitalize on what has already been deemed the easiest time to find the home of your dreams.
*This guest post was contributed by Than Merrill, CEO of FortuneBuilders, former NFL player, author, and businessman.
Bio: Than Merrill, CEO of FortuneBuilders, is one of the most successful real estate investors in the nation. As a graduate of Yale University and a former NFL player, Than attributes his success in sports, business, and investing to coaching and education. Than exhibited his real estate prowess as he starred on A&E’s Flip This House, is a highly sought after speaker, and bestselling Amazon author of “The Real Estate Wholesaling Bible.” Merrill is also active in philanthropic efforts and started a non-profit charity, with his wife Cindy, called Equal Footing Foundation. In addition to his own charity, Merrill spearheaded the creation of FortuneBuilders Gives; the company’s philanthropic initiative to provide opportunities for employees and students to give back to their communities.