It’s advice that’s repeated ad nauseum when agents and brokers look for ways to reach new millennial clients: embrace online reviews, mobile websites, open transaction data and hyperlocal expertise.
A comprehensive report from Zillow Group suggests agents may want to take heed: the real estate behemoth has found that technology plays a big role in how buyers choose which agent will get their business and what buyers expect from that agent.
This is especially true for millennials (aged 18 to 34), who are less likely to use a real estate agent, but more likely to be loyal to one they do use, according to the report. Half of all buyers in the U.S. are under the age of 36, the report said.
“Agents should be aware that millennial clients approach the homebuying process in a different way than older generations,” Zillow Group spokeswoman Amanda Woolley told Inman via email.
“Millennials want an immersive experience and bring all available tools to the process, including their smartphones, social media and online networks, so you should expect to leverage those same tools and processes.
“Millennials are extremely loyal to their agents and expect their agent to be a strategic partner in the process. If you are successful with these clients, you may have a client for life.”
How do millennials show their loyalty?
“More than half (55 percent) of millennials have recommended their agent to others, and more than one quarter (26 percent) have left an online review of their agent,” the report said.
“In addition, 40 percent stay in touch with their agent, turning to a real estate professional for home improvement advice almost twice as often as Generation X and more often than other older owners.”
Agents aren’t the only game in town
The vast majority of millennials — 70 percent — choose to use an agent when purchasing a home (75 percent of all buyers do), according to the report.
But that doesn’t mean younger buyers rely solely on their agent for information.
“The process of finding or selling a home is much more collaborative for millennials than for older generations,” the report said.
“While older generations rely on real estate agents for information and expertise, millennials expect real estate agents to become trusted advisers and strategic partners.”
Screen shot from Zillow Group’s Consumer Housing Trends report
The report found that millennials make up for their relative inexperience when it comes to homebuying by educating themselves and researching agents more than any other generation.
Nine out of 10 millennials turn to the internet, and eight in 10 use mobile devices or apps to help with the homebuying process, according to the report.
“On average, millennial buyers and sellers use at least three online resources; one in four (28 percent) use five or more online resources,” the report said.
“They also turn to the internet to model financial scenarios, with more than two out of three millennial buyers who have a mortgage using interest rate and affordability tools and mortgage calculators.”
Buyers aren’t replacing agents with online research, but they are doing “a tremendous amount” of research online before contacting an agent, according to the report.
“Eighty-seven percent of buyers use online resources and 75 percent select a real estate agent or broker to work with, suggesting that most buyers combine self-directed research using websites and apps with the market expertise and human touch offered by a real estate professional,” the report said.
“In fact, buyers who utilize online resources during their home search are significantly more likely to also use an agent (77 percent versus 59 percent who do not use online resources).”
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Younger buyers more likely to interview multiple agents
Sometimes prospective buyers and sellers will interview a single agent and that’s it.
Don’t count on that with your youngest clients.
Millennials contact more agents — at least two when buying, at least three when selling — than any other generation, the Zillow Group report said.
“The average number of agents buyers consider hiring is 2.2. Slightly more than half (53 percent) of buyers using an agent considered multiple agents, with 26 percent choosing from two,” the report said.
“There are marked differences among the number of agents considered when it comes to the generational cohorts.
“Sixty-eight percent of the Silent Generation [aged 65 to 75] and 57 percent of baby boomers [aged 50 to 64] considered only one agent, compared to 44 percent of Generation X [aged 35 to 49] and 38 percent of millennials considering just one agent.”
Screen shot from Zillow Group’s Consumer Housing Trends report
More than six in 10 millennials read online agent reviews before making their choice, compared to half of all buyers.
Millennials were also more likely to look up an agent’s past sales history than buyers overall (57 percent versus 46 percent).
How buyers find their agent
A third of buyers find their agent via referrals, 26 percent find their agent online, 10 percent choose to work with an agent they’d worked with before, and 7 percent find their agent through either an open house or they knew him or her from the community.
“Millennial and Generation X buyers are more likely to find their agent online, with 29 percent and 27 percent respectively finding an agent through this resource,” the report said.
“Just 20 percent of baby boomer and 17 percent of Silent Generation buyers use the internet to find their agent.”
How buyers choose their agent
Buyers in general, no matter what generation, prioritized first impressions and confidence in an agent’s local market knowledge in choosing whom to work with.
“More than 80 percent of buyers chose these traits as top determining factors in choosing an agent, viewing them as more important than an agent’s recent sales results, a personal referral, or being a part of a recognizable brokerage,” the report said.
“Regarding first impressions, buyers prioritized both trustworthiness and responsiveness as traits they’re looking for when first meeting an agent,” the report added.
How buyers communicate with their agents
In regard to how buyers want to communicate with their agents, some of the report’s findings may be surprising.
The report found millennials tend to prefer talking to their agent on the phone or meeting their agent in person over texting.
Screen shot from Zillow Group’s Consumer Housing Trends report
And the older the buyer, the faster he or she expected an agent to respond to a first inquiry, the report found.
“Over half of Silent Generation buyers (52 percent) expect agents to get back to them within a few hours, versus 47 percent of baby boomers, 40 percent of Generation X buyers and 40 percent of millennials,” the report found.
“Among all buyers, 78 percent expect a response within one day. Only 22 percent consider it acceptable for an agent to take two or more days to respond.”
What buyers want from their agents
When asked about the services buyers want from their agents, the top service expected was private home tours, followed by alerts for new homes, having the agent preview homes for them, referring them to an inspector, and sending them listings just outside their criteria.
Just a quarter thought a lender referral was important.
Screen shot from Zillow Group’s Consumer Housing Trends report
Survey respondents were not asked specifically about any other agent services provided to buyers, such as contract negotiation.
About the survey
More than 13,000 U.S. residents aged 18 to 75 responded to a 160-question online survey from independent market research firm Lieberman Research Worldwide between April 27 and May 12, 2016.
Respondents break down to 3,003 buyers, 3,003 sellers, 3,082 homeowners, 3,000 renters and 1,161 long-term renters.
The survey was “blinded,” meaning the respondents did not know Zillow Group was its sponsor. Both Zillow Group and Lieberman Research designed the survey, analyzed the results and created the report.
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