Younger Buyers vs Baby Boomer Sellers: Solving The Tug-of-War

 

Life is always on the move—marriage, growing families, retirement, downsizing, relocating to be near family. As we work with Baby Boomer sellers, they are excited for the next chapter: a smaller nest, less responsibility, and more quality time with loved ones. Our Millennial and Gen Z homebuyers are full of hope to purchase their first home.

They are two very different generations with opposite mindsets. Here in lies a major real estate struggle:

• Boomer Sellers want to list their properties as-is.
• Younger Buyers want to purchase turn-key homes.

But we at RE/MAX Alliance believe in win-win solutions. 
And frankly, our current market demands it. With higher interest rates, limited inventory, and home prices growing, the Front Range remains a soft-yet-stable seller’s market. A more balanced market requires a different approach and strategy for both parties. With a bit of empathy and willingness to compromise, both parties can come away from the closing table successfully.

WORKING WITH BABY BOOMER SELLERS
Homebuyers, here’s what you need to know about Baby Boomers (Source: Morning Consult and Leaf Home, a home improvement company):

–  Empty-nesters own 28% of the large homes (millennials with children only own 14%) according to Redfin.

–  68% of Boomers have lived in their homes for 30 years or more.

–  Many admit they’ve never done renovations or replaced significant appliances.

–  Even if they are downsizing, remember they may be leaving an ultra-low mortgage rate, so they may still have a tight budget.

The idea of renovating to sell is very unmotivating to Boomers. The effort, time, and cost simply aren’t worth it to them—even if updating could bring them a higher return! 

Mindset Switch: 

–  Buyers, would you be willing to put in a little elbow grease? How much effort and time are you willing to invest in updating your first home?

–  In this market, very few sellers are closing on their homes “as-is.” Have confidence in your negotiating power!

Solutions: 

–  If the home has been sitting on the market for weeks or months, you can negotiate for a lower price and more concessions (to free up cash for renovations).

–  If the updates are more “livable,” you can do them once rates drop and do a cash-out refinance.

–  Even if the home is priced well, sellers may be willing to negotiate to make essential repairs.

Read: Minor Upgrades Can Have a Big Appeal

 

WORKING WITH YOUNGER BUYERS
Sellers, young families need extra space and are stuck in the rental market:

–  Millennials with kids make up 25% of the three-bedroom-plus rentals in the U.S. (the largest of any other generation).

–  Young adults are stretched financially thin between high home prices and mortgage rates (not to mention young professionals’ salaries). 

–  Parents with kids are also limited in time, effort, and cash for renovations.

–  Young homebuyers are more selective with their limited budget. So, homes not in turn-key condition are more likely to sit on the market. 

Mindset Switch: 

–  Sellers, would you be willing to invest a little time and effort into updating your home? If not, what are you willing to compromise on terms or provide incentives?

–  In this market, you will not have the same negotiating power as your neighbors in 2020-2022. But you don’t have to “give the farm away” either! This market remains in favor of sellers, so you have negotiating power!

Solutions: 

–  Get the complete picture of your home with a pre-inspection so there are no surprises, and you can negotiate more effectively.

–  Consider the ROI even small updates could have on your property (your RE/MAX Alliance agent will have suggestions and resources). 

–  Talk with your RE/MAX Alliance agent about programs like Curbio, where you won’t pay upfront for remodeling/repairs (they’ll be included in closing costs). 

–  Offer concessions like buydowns that save buyers thousands of dollars they can put towards renovations.

–  Even if your home is priced well, your willingness to make small compromises may give you the edge on your competition and catch young homebuyers’ attention.

Read: Pre-Inspections Empower Sellers

Source: Realtor Magazine