Phil Spencer: Today's First Time Buyers and Tomorrow's Vendors

The other day I read a story here on Estate Agent Today, which was both depressing and inspiring.

It reported a study of what first-time buyers felt about the house buying process. Perhaps unsurprisingly, they were baffled and intimidated.

Well over half were confused, overwhelmed at dealing with agents and mortgage lenders and surveyors, and concerned at looking stupid when speaking with professionals.

This time it wasn’t a case of “just another survey” because the Skipton spoke to 2,000 first-timers, so it seemed highly representative - and I have to say I felt complete sympathy with them for being deterred by the complexities and slowness of the house buying process.

So far, so depressing - but how did this story become inspiring?

An opportunity for agents to become authorities

Well, many of the survey’s findings struck a chord with me.

When I help even seasoned buyers find their next home, I see how much of the process is a mystery to the layperson who moves only four or five times in their lives. For first-time buyers who have never encountered the process before, the puzzle is that much greater.

So here is where the best agents can seize the day. Why not become a local ‘guiding hand’ for first-time buyers?

Of course, your primary duty is to your client, the vendor, but that should not preclude you from simultaneously becoming known for the help you can offer first-timers. After all, the stats show that today’s first-time buyers will sell in around four to five years' time, so it’s in your interest to nurture these prospective vendors.

Practical steps

So, for example, if you have a relatively junior member of staff - not necessarily a negotiator, who may be too busy - why not make them your ‘first-time buyer specialist’?

They could be equipped with simple documents to give to first-timers.

Dare I say it but my Move iQ service no fewer than 25 online guides ranging from a checklist of everything the FTB should encounter to more specialist advice covering shared ownership or buying a doer-upper as a more affordable first step on the ladder.

And for first-timers who come to your office, why not present them with the government’s 18-page How To Buy book.

You didn’t know about it? I’m not surprised as it’s given little publicity, but it’s written in plain English and covers everything from preparing paperwork to getting a mortgage and understanding what an Energy Performance Certificate is.

I bet you would be the only agency in your area to have copies and give them to young buyers, putting their names down with you.

Appreciate First-Time Buyers' Worries

You can gain another advantage by getting behind the headlines and working out specifically what’s worrying first-time buyers.

The Skipton survey offers some interesting highlights. Three of the key questions which concerned FTBs, but which they were worried might make them look silly, were:

“Should I offer less than the advertised house price?”

“How much deposit will I need?” …and…

“How long does my mortgage offer last?”

In reality, these questions aren’t silly at all but while the answers may be obvious to us, you can appreciate that for someone who hasn’t dealt with the house buying process before, they can be a worry.

And perhaps your specialist could draw up a list of jargon-busting definitions.

Whether we like it or not, schools and colleges (and parents too) are unlikely to cover personal finance for young people, who will be unfamiliar with terms like Decision In Principle, Loan To Value, Guarantors and Completion - and often as an industry we’ve indulged in jargon which we understand but the wider public does not.

Now is a time to remedy that, at least for first-time buyers.

Learn The Schemes

Your branch FTB specialist could also be across the various schemes, many of which are aimed at the younger end of the market.

I’m talking about things like Help to Buy Equity Loan, the Lifetime ISA and Shared Ownership schemes which may not be the bread and butter work for your seasoned negotiators dealing with experienced buyers, but are vital lifelines for many FTBs who find it tough to raise deposits and cover mortgage costs right now.

What’s In It For The Agent?

Now I’m only too aware of how easy it is to say all this - it takes time and effort to allocate an individual to this task, and for them to carry it through.

But as the market frenzy of the past two years slows at least a little, becoming the local first-time buyer ‘helping hand’ can pay long-term dividends.

There’s plenty of PropTech and marketing right now aimed at agents and telling them to nurture prospective sellers, to make sure they think of your brand and your local office when they eventually bring their home to the market.

Why not regard an investment in first-time buyers in the same way? The impression you leave now will pay dividends in years to come as young purchasers become more mature sellers.

You may have a client for life, with the goodwill and word-of-mouth recommendation that is so valuable in our industry. That’s definitely an investment worth making.

Have a great July!

*Phil Spencer is a presenter, author, businessman and property investor. Phil’s consumer advice platform Move iQ, is a website, YouTube channel and podcast. Each preserve and reflect the same impartiality that consumers trust and base their property moving plans. Phil’s Move iQ Pro, is coming in 2022! It will connect select property professionals with Move iQ’s consumer audience. If you’re interested in hearing more subscribe here.