The spring home buying season is in full bloom.
The good news is that intent to buy has increased across Canada, with 29 per cent of Canadians planning to purchase a home in the next two years, according to the 2016 Annual RBC Housing Poll. Younger Canadians between the ages of 18-24 are showing a marked increase in intent to buy a home compared to previous years (43 versus 34 per cent).
Whether it’s wanting a change in lifestyle, pride of ownership or looking to build equity, there are many reasons why younger people are looking to buy a home. For most of them, they will be first-time homebuyers and the process can be that much more daunting without the proper advice and preparation.
Here are some tips to keep in mind when working with this segment of clients:
Know your client
When you meet with a potential first-time home buyer, get an appreciation for how much they understand about the home buying experience; but also keep in mind that today’s buyers are much more knowledgeable. Now many buyers have already done a lot of research online and are familiar with mortgages, market conditions and advertised rates. Assume some level of knowledge on the part of your client, while still acknowledging that they are new to the home buying experience and need additional guidance throughout the process.
Ask the right questions to help them find the ‘right home’
Because they are younger buyers, they have specific needs that should be addressed from the get go. For example, ask your client about the neighbourhood they want to live in. Are good schools and community centres important? What about parks or amenities? Ask the questions that will help uncover what their future needs might be. A lot of younger buyers don’t think about those things. In fact, only three per cent of 18 to 24-year-olds consider good schools a must have when purchasing a home.
Help clients think short and long term
When determining what kind of house your client wants, help them understand their needs in the next five to 10 years too. Just asking the questions help home buyers understand if they want a home they can grow with, or whether they will treat this as a starter home. Have them think about whether they will need an office or nursery or if they will have an older relative come to live with them. Take the time to help your client paint a clear picture of their needs today as well as their possible future needs.
Ensure they create a proper budget
Have an honest discussion around what they can comfortably afford today and in the future. Find out how familiar your clients are with the costs associated with purchasing a home – including lawyer fees, moving costs and property taxes. Have a conversation around ongoing monthly home ownership costs. Helping first-time home buyers understand this impact to their personal finances could be beneficial.
Understand the role of emotion
My last piece of advice for real estate salespeople working with younger buyers – although this applies for all potential home owners – is to always remember that buying a home is emotional. Despite all of the technology available these days and all of the listings and homes for sale, buying a home is still full of emotion – good and bad. Listen to your clients’ wants and needs and try to be truly helpful. You’re an unbiased advisor and young buyers will appreciate your sincerity and support.
Erica Nielsen is vice-president of Products and Segments with Home Equity Financing, for the Royal Bank of Canada. RBC celebrates the 5th annual RBC Realtor Appreciation Week April 11-15.
