Most people know someone who works in real estate. Experts claim that the average person knows seven real estate agents. There can be some real advantages to working with a friend when buying or selling a home. You already know them and they know you. They probably have a good idea of
what you are looking for. You know exactly what you are getting: the good, the bad and the ugly. You also know how much experience they really have, how they handle stress, communication, ethical issues, job commitment and how seriously they treat their job and client relationships.
But, here are a few things you might not have thought about. Are they the best fit for the job, the house or the town? Hiring a local agent that knows the area is extremely important. Agents cannot be all things to all people, and working with someone who has experience selling houses in your town will go a long way to making sure your goals are met.
Are you okay with your agent/friend knowing your personal financial situation? Whether you are buying or selling, your agent will need to know about your personal finances. Decide if you are comfortable with your friend knowing this information.
Are you comfortable firing them if necessary? One of the most challenging things about hiring your friend to be your real estate agent is that if things don’t work out, you can’t fire or sue them without damaging the friendship.
Will the friendship be damaged if this business transaction doesn’t go smoothly? I often hear people say that they have to hire their friend because they’re worried that their friendship would be damaged if they don’t. That’s the number one reason not to hire them. If your friendship hinges on you hiring your friend to buy or sell a house, imagine how that friendship will be harmed if things go poorly?
What about a commission discount? It might seem like a big advantage if your friend is offering you a discount on commission, but what are you giving up in exchange? Are they going to skimp on marketing costs? Prioritize higher paying clients? Cheaper is rarely better. Do you want to help your friend? I get it. Your friend just got their real estate license, and they’re struggling to find clients. But do you really want the sale of your largest financial asset to be training for your friend? Just because someone got their driver’s license doesn’t mean you are ready to put your kids in the back seat. It’s risky. Having a new agent represent you can cost you tens of thousands of dollars.
It’s always hard to mix business with friendship. My advice is to make the decision carefully. If you decide not to hire your friend, be honest and direct about your decision. If you don’t want to harm the friendship, don’t let them first find out your home is for sale by seeing it on the internet. Just explain the reasons for your choice. Real friends will respect your decision and not make you feel guilty about it.
Lastly, keep in mind that it’s easier to buy a house with an agent friend than sell one. Selling is much more stressful than buying and requires more experience. If you want to try working with your friend, focus on buying with them instead of selling. I’ve had many clients hire me to sell their property, but work with a friend to buy something new. This will help maintain the relationship but keep the sale of your most valuable asset outside the friendship.
Have a Real Estate Question?
Feel free to email me any of your questions and I would be happy to answer them next month in this column or directly to you. Email me at firstname.lastname@example.org