The topic of millennial homeownership is one extensively covered in the media. However, many articles fail to discuss the modern approaches millennials use in the home buying process. The internet and new technologies have opened up an array of new methods in the area of home buying, and tech-savvy millennials are often adopting these new methods in their pursuit of property.
From applying for home loans online to purchasing properties sight-unseen, below are a few unique ways millennials are approaching homeownership.
Viewing properties online
A recent study by the National Association of Realtors found that a whopping 99 percent of millennials look online when conducting a search for homes, with 58 percent saying they found their home using a mobile device. These high percentages demonstrate just how important the online sphere is in the average millennial’s homeownership quest.
The study showed that agents are aware of this importance, with more than 90 per cent of real estate firms having websites, and property listings being the most common feature of these sites.
Another side to the idea of viewing properties online is the possibility of virtual reality tours for homes. There are two popular types of virtual tours: guided visits and interactive visits.
Guided visits can either be 360-degree videos or fully virtual. They require a panoramic camera to take the 360-degree video and offer potential buyers the ability to get a feel for the place without visiting it physically.
Interactive visits offer more choice of movement for the viewer, allowing them to choose where in the property they would like to move to and view. This process is more complex to create, however, it can offer a more immersive experience for clients than guided visits.
Making offers sight-unseen
A picture’s worth a thousand words. That age-old adage seems to apply to millennials buying property, as more and more appear to be heading towards purchasing places without physically viewing them first. Another recent study found that 45 percent of millennials who bought a home in 2017 made an offer sight-unseen. That’s almost half of millennials surveyed saying they made an offer on a property without stepping foot inside it first!
According to the study, “these results likely reflect millennials’ comfort relying on information they find online about homes for sale, neighbourhoods they might not have visited in person and the home-buying process in general.”
This data shows that it may now be more important than ever for properties to be listed with many high-quality photos, house layouts with measurements, and clear and thorough descriptions.
Researching home loans online
Thanks to the internet people can now quickly and efficiently research and compare home loan options without even stepping foot out their door! This includes comparing the rates of different lenders as well as the different mortgage options available. Gone are the days of having to physically visit each bank and lender and pouring through pamphlets to work out which ones might be best. Now all the information is readily available on the internet, and there are even sites out there that can help compare the options!
There are also websites available that can calculate the mortgage amount potential homebuyers may be able to borrow, the amount of equity potential homebuyers have, and what the monthly repayments may be on a property (among many other calculators).
Applying for home loans online
Not only is it possible to research potential borrowers and calculate mortgage repayments online, but some millennials have taken to applying for the home loans that way too!
A 2018 Borrower Insights Survey released by Ellie Mae found that 16 per cent of millennials completed the mortgage process online, while 37 per cent combined in-person interaction with their online application. Adding to this, 70 per cent of millennials went the online route for either part or all of their most recent mortgage application.
Executive vice president of corporate strategy at Ellie Mae, Joe Tyrrell said this trend offers “a great opportunity for mortgage lenders.”
“As lenders embrace a true digital mortgage, borrowers will get the benefit of both a high-tech process to make things go faster and a human-touch experience, providing transparency and building their confidence,” he said.
While, in general, millennials appear to still seek out person-to-person interaction for at least some of their mortgage process, it seems that many are gravitating towards a combination of human interaction and online components for it.
The digital age has welcomed in a range of new options for homebuyers, and many millennials are adopting these modern changes. Whether it’s using virtual reality to view a property without physically visiting it or using the internet to evaluate and compare potential lenders and home loan options, millennials are using technology to help themselves achieve a smoother homebuying process, tailored to their wants and needs.