First Steps to Helping First Time Buyers

Marketing to and supporting first-time homebuyers

By Myrna Traylor

Even though homeownership is a cornerstone of the American economy and a goal for many Americans, helping individuals make the transition from non-owner to owner is a process that requires some management. REALTORS® and CRSs have to approach their neophyte clients in a way that will result in success on both sides of the handshake.

First, CRSs must attract these rookie clients. Word-of-mouth referrals from friends and family go a long way in communities where new buyers have longstanding ties, but relocations or retired brokers can leave a referral gap.

“On average, we procure 500 to 1,000 buyer leads a month,” says Barry Jenkins, CRS, of Better Homes and Gardens Real Estate in Virginia Beach, Virginia, “and a high percentage of them are first-time homebuyers.”

Jenkins delivers automated content through a variety of channels, including voicemail drops, text messages, videos from BombBomb.com and emails. Since the messages focus on educating the new buyer, “this inherently creates value with the buyer and we don’t have to ask for their business. They want us to represent them. We hope to close between 160 and 200 transactions this year as a result of this approach,” Jenkins says.

Christine Tomovich, CRS, with Your Castle Real Estate in Denver, seizes other opportunities.

“The way I market to first-timers is that I talk to everyone. I have a passion for helping them and it shows,” Tomovich says. “If I am buying a pillow in a mattress store, or having a vendor fix something in my home, I ask them if they own a home. We already have somewhat of a relationship since they are helping me with a problem or a purchase myself. I don’t do direct mail marketing or farm. I do try
to stay in touch with my sphere.”

Other REALTORs® use a blend of old-school and new methods to get people on board. Rick Borelli, CRS, of Howard Hanna Real Estate Services in Lakewood, Ohio, markets to first-time homebuyers through tried-and-true open houses, but augments this with advertising on social media and seminars for first-timers held in his offices.

“We contact renters through a program we call The Apartment-Dweller’s Trade-In Program,” he says. The program will assume leases for qualified renters, if needed, to facilitate a timely home purchase when stock is available and interest rates are favorable.

Financial education

Undoubtedly, learning the ins and outs of home financing is the biggest hurdle for many first-timers. Dave Pautsch, CRS, with RE/MAX Integrity-Albany in Albany, Oregon, volunteers as an instructor for a regional home-buying counseling program. “I work very hard to educate and inform first-time buyers about how things really work. Separating myth and legend from good practice is a perpetual process,” he says.

Pautsch reinforces his teaching through his weekly radio show, Real Estate Talk, which he uses to inform first-time homebuyers about the realities of saving up for that first big purchase. “On my show and in my interactions with first-time buyers, I offer to pay for [the first-time homebuyer’s] class. The tuition is $45, but that money is well-spent on my part, as paying for the program starts to build a bond and, more importantly, once they’ve completed this class, they are much more confident about the process and how things work.

“In many ways, I approach first-time buyers like a parent,” Pautsch says. “My goal is for them to be happy, to make good decisions and to achieve their goal.”

A little hand-holding

As many parents will attest, it can be difficult to get the people you are responsible for to heed your advice.

“My buyers are very smart, but new buyers don’t know what they don’t know, so they can head out in a wrong direction,” Tomovich says. “They want to show you what they know and this attitude can get them in trouble.”

Tomovich has developed strategies for helping first-timers get over feeling intimidated by their REALTOR®, or worried that they will be manipulated or not get what they want.

“To counter these mindsets, I emphasize to them that we are a team,” she says. “I educate them about the process as we go looking at homes and they get smarter along the way until they can walk into a house and make pretty accurate assessments of price, neighborhood, features and so on.

“I tell them they will get to the point where they know a lot about the real estate market. They like being told that and it’s true. Once we are on this more level playing field, they are more willing to listen to me with confidence, and I find they begin to value my experience.”

Making it real

Pautsch has also found that making a tangible, practical change in a client’s lifestyle helps some first-timers understand the week-to-week impact of a mortgage payment.

“I encourage all my first-time buyers to start living today like they are paying that mortgage,” he says. “If their rent is $800 a month and they feel that they can afford a mortgage payment of $1,200 a month, then taking the difference ($400), putting it away and not touching it during the next few months as we work through the process will pay big dividends later. First, they will have a nice nest egg to add to their funds for purchase, or perhaps to go toward furniture or a new big-screen TV. More importantly, it will give them confidence that they truly can afford this house when we find it.” 

Myrna Traylor is an editor and freelance writer based in the Chicago area.

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