There are four major fears keeping Millennials from buying a home, according to a recent survey from NerdWallet: the fear of committing to a partner; the fear of inevitable home repairs; the fear of not having money for other expenses; and the fear of the financial commitment to a home. We have some suggestions for how agents can tackle those fears in their Millennial clients.
1. The fear of committing to a partner
The NerdWallet survey found that 20 percent of Millennials ages 18 through 34 were afraid of the long-term commitment buying a house with a partner represents. However, only 4 percent of the 2,000 respondents ages 35 and older shared the same fear.
Chris Ling, NerdWallet’s head of homebuying and mortgages, understands where the fear is coming from. He explains, “It’s not as simple as if you split up, one person can stop paying.”
To help eliminate that fear, agents can frame the property as an investment the client could rent out if the partnership doesn’t work. According to bankrate.com, Millennials should consider the option of reselling the house to move past the joint debt or refinancing the loan under the name of one person in the house as an easy fix.
2. Struggling with home repairs
Millennials may feel unsure in their ability to handle home repairs needed due to weather, accidents, or updates. But reasonable home repairs are not something that should hold a homebuyer back.
Agents can point their clients to their own network of local resources and service providers. Clients should also be aware of resources like Angie’s List, Houzz, and HomeAdvisor, which specialize in helping homeowners find professionals to tackle renovations, offering prices and reviews.
3. Limited freedom for other expenses
Millennials are concerned about how a home purchase will impact their finances and their ability to pay for other expenses. Bank of America has a few tips on how to manage money around a home purchase.
Agents should ask how their Millennial clients approach budgeting, and have a few tips ready. Bank of America suggests Millennials figure out their net income to get a picture of how much money they have to work with. Next, Millennials should set reasonable financial goals. And lastly, Millennials need to track their spending carefully, factoring in mortgage payments and any other costs of homeownership.
4. Financial commitment to a home
Buying a home is one of the biggest purchases a person may make, and it can be an intimidating prospect for Millennials. Agents can help make the process less daunting by educating their clients on how to prepare themselves for the commitment.
Bankrate.com offers some basic tips on financing a home. Potential homeowners should first build strong credit to help with securing a loan. By demonstrating the ability to save and budget, Millennials can prep themselves for the mortgage payment process. Also, reducing debt as soon as possible, whether student debt or something else, is always recommended when going into an important purchase. Ultimately, the most important thing your buyer should be is informed. The dangers of entering the market without proper information could cause buyers to back out prematurely.