Editor’s Note: The Playbook is an RISMedia biweekly segment centering on what brokers and agents are doing to ensure they not only survive but thrive in these challenging times. Industry professionals explain the strategies they’re employing and unique ideas they’ve formulated. Tune in every other Thursday for another addition to the series.
First-time buyers have been at the forefront of a lot of real estate conversations, as market challenges have left this demographic out of the real estate game—creating what often feels like a mountain that needs to be climbed in order to reach their goals of homeownership.
The up-and-coming generation of homebuyers breaking into the market for the first time, Gen Zers (aged 18 – 26) are the eponymous first timers truly struggling to take their first steps. To help this demographic achieve their homeownership goals, real estate professionals need to step up to the plate and show them the way…but how?
In her role as team leader of the International Group at RE/MAX Professionals in Lakewood, Colorado, REALTOR® Lisa Nguyen is laser-focused on educating Gen Zers in regard to the ins and outs of homeownership.
What is your experience working with Gen Z clients? What are your thoughts on their home-buying journey?
I specifically have a team of 14, and I have three agents who have come on board in the Gen Z category. I actually call them my Gen Z agents.
What we’re finding that’s different from millennials is that Gen Z has actually figured out the formula and how to work smarter, not harder. What I mean by that is that they’re way more advanced in the technology realm than other generations have been. Whether it’s AI or ChatGPT, they’re able to find more information online than previous clientele. If you think about the internet and technology, information used to get relayed a lot slower. We can communicate a lot faster than we were able to in the past. I also think that Gen Z is a lot smarter than we give them credit for. Since they have this information readily available online, they know what they need to do to begin saving up and prepping for purchasing.
I see a lot more Gen Zers living with their parents, and more generational living overall, because of the rise in prices. They’re waiting longer and taking their time to figure out their lives than they have in the past. And all that’s doing is allowing them time to save up more for a down payment and cut their costs while they’re saving up for a good opportunity.
Another part is that many Gen Zers have immigrant parents, so they are first-generation American. I’m seeing that some of these Gen Zers are the first in their families to be able to purchase homes, and that’s the beginning of generational wealth building. When I think of serving underserved communities, the first person that’s in the family to go to college, the first person to also get their home, it’s the first person that’s setting up the future generation.
What are some specific ways you’ve worked with Gen Z buyers to help them take the first step toward buying a home?
We’re explaining to them that from the patterns of what we’ve seen in the past—housing prices have been continuing to grow for years—and having conversations about how some of them are paying the same amount in rent as they could in a mortgage, while renting is making them nothing. Granted the higher interest rate, because that’s something that’s so foreign to them, but it’s still a good investment. It’s always a good time to buy.
You also have to explain that their parents have built their wealth through real estate. If they continue to wait until it’s the right time, they’re going to be waiting forever, because all we’ve seen is prices continuing to go up year-over-year. You’ve got to take it while it’s there; buy and refinance later.
There’s also a misconception that you buy a home for life. You have to explain to Gen Zers that they’re not going to be purchasing their forever home. This is their starter home. So whatever amount of money they have, use that money and buy a property— and later, turn it into an investment property and then buy another property. But at least buy something.
Another way that I get them in the market is to educate them on first-time homebuyer grants that are available. There are so many different grants in each of the communities being given out. There are also demographic grants that depend on the type of demographic in the neighborhood, or if you’re low income. A lot of the banks are stepping in and giving out grants that don’t even need to be paid back. They have so many resources at their fingertips. This all means that if they don’t have the down payment, they can still figure it out.