For those of you who are familiar with the works of Bob Dylan and recognized the allusion I was making with the title of this week’s article, please let me assure you of one thing: some of this is probably going to make as much sense as Bob Dylan’s singing voice is intelligible. And for those of you who have no idea either who Bob Dylan is or what song I was going for, let me assure you of this: I WISH I was making this up!
Recently, as I was scrolling through my Instagram feed, I came across a meme that read just like this: “Millennials Are Buying Homes Because of Their Dogs – Not Their Children or Marriages.” Obviously, something like this would stop me in my tracks, and it did. But just as I was starting to smile because I believed it was one of those fake headlines that someone who has more time on their hands than is reasonable had created, I decided to type that exact headline into the search engine to see what really popped up – I was curious to see what true headline had been virtually contorted to come up with what I was seeing in my Instagram feed.
I typed it in and was directed to a link for an article published by Money magazine on July 27, 2017, and when I clicked on the link, what did I find? THAT EXACT HEADLINE! Had the article been dated on or near April 1st, or had it been published by The Onion, I would have laughed and thought, “You got me. You got me good!” Last I checked, though, Money isn’t known for practical jokes. Still reeling from all this, I dove into the article and began reading.
The author of the article, figuring she had sucked you in with her headline (and she had), opened with these two sentences: “It’s no secret that millennials love dogs, and now their four-legged friends are starting to influence the decisions they make about housing. A recent survey by SunTrust Mortgage found that a third of millennials who had already purchased their first home said they were influenced by the need to have space for a dog.”
What the author writes next MAY make your head explode, so you might want to lay down some visqueen and have a roll of duct tape handy: “The survey asked recent home buyers why they were buying their first home, and their dog was the third most commonly cited reason, COMING ABOVE CHILDREN AND MARRIAGE (the all-caps emphasis was added by me). Only more living space and the opportunity to build equity came above the furry companions.”
This means a complete shift in how we market and appeal to these new homebuyers. Will these new buyers be bringing their dogs along on the house hunt to see if the neighborhood smells right? If the dog pees on the carpet in a particular house, is that a good or bad sign? I promise not to trot out the old chestnut “the world is going to the dogs” . . . mainly because, it appears, it already has. Don’t bite the messenger.
Someone much wiser than I – which, let’s be honest, is a fairly large group that might have trouble finding a meeting space big enough to get together – once shared this little nugget with me: “Seek first to understand, then to be understood.” As mortgage and real estate professionals, we’re required to take a gajillion hours of classes and then take a crazy confusing test JUST to get our licenses, so it’s natural to think we know a lot right out of the gate and that the world is just waiting for us to share it with them – and that feeling of being omniscient only grows over time. (I’ll pause here if that last sentence made you laugh and caused you to shoot milk or another beverage through your nose and onto your keyboard.)
The cold hard truth, really, is that someone with absolutely no experience in our industry could run circles around a 20-year veteran if she follows my friend’s advice and the veteran relies solely on his expertise. Paperwork, forms, negotiation, the art of the deal: all of these things can be learned along the way (and fine tuned and improved, of course, over time), but understanding the client, her needs, her goals, and her viewpoint HAS TO take place BEFORE anything moves forward. Failing to do so or expecting to learn it along the way will only lengthen the process far more than necessary and waste a lot of time.
With that said, I have to make a confession: until I read a recent article from NerdWallet, an online financial consulting company, I thought Millennials (as a homebuyinggroup) were just a bunch of whiners living in their parents basement waiting for an inheritance. Obviously, I didn’t seek to understand; I just thought everyone understood and shared my viewpoint.
For the sake of reference, Millennials are those folks who were born between 1981 and 1997: 21-37 year olds. Here are some of the items the smart ones over at NerdWalletshared in their article that caused me to look at this group of 66 million people a little differently:
•Median age for first-time homebuyers in 2015 was 31 years old as compared to 30.6 in 1970-74
•Two-thirds of these folks haven’t even reached that homebuyingage of 31, and 22% are under 25
•Millennials are renting for a median of six years before buying as compared to five years in 1980
•Millennials are expected to form 20 million new households by 2025
Also, to add further to my understanding, Fannie Mae conducted a survey among Millennials and found that more than a majority had a positive outlook about purchasing a home; two-thirds of the respondents felt it was a good time to buy even after the housing market collapse. Looks like these young folks DO want to purchase a home!
Lastly, Fannie Mae’s survey found that one of the biggest factors keeping Millennials from buying a home is perception, not reality. When the surveyors dug into the answers of “renting is a more affordable option” and “cannot obtain a mortgage”, they found that these answers were largely based on the belief that a 20% down payment is required and a 750+ credit score is the low bar. (Some of you may be shooting milk through your nose again. I’ll wait.) Reality is more like 3-5% and a credit score of 600+, generally speaking.
There’s a giant wave of Millennials coming, and they obviously need to be educated. Are you ready? If you want to make yourself even more invaluable to this huge bloc of future homebuyers, offer to teach them how to drive a car with a clutch.