There are thousands of licensed Realtors in California so the chances are pretty good that most potential home buyers or sellers have a friend or family member in the real estate business.
The question is: Should you mix business and friendship – or business and family – and hire a friend or family member to represent you in your real estate transaction? The answer isn’t usually a simple “yes” or “no” and there are a number of factors to consider.
Helping A Friend … At What Cost to You?
Sometimes we hear from potential sellers or buyers that they have a friend who just got their real estate license and they want to help them out by working with them. Buying or selling a home is one of the largest financial transactions you make in your life, and who you hire can have a major impact on both how smoothly the transaction goes as well as your bottom line. Let’s say you needed heart surgery. Would you go to a friend who happened to be a general surgeon or would you seek out a highly rated surgeon who specializes in heart surgery? Would you work with your friend the surgeon simply because they needed more surgery business? Selling your home isn’t a life or death matter, but who you hire can impact your bottom line significantly. You want to make sure anyone you hire is experienced and knowledgeable about real estate in your area.
We’ve seen homeowners leave thousands of dollars on the table because they selected a friend or family member who wasn’t familiar with their area, priced the home inappropriately, failed to market the home effectively, or wasn’t able to negotiate to secure the highest possible price.
But They’re Giving Me A Discount or Rebate … Doesn’t That Make It Worth It?
If you sell your home for $500,000 with a 1 percent discount on the commission and you could have hired someone for a full commission and obtained 3 to 4 percent more, how much have you really saved? And for buyers, how valuable is that “rebate” your friend has promised you if they’re unable to properly help you determine what price to offer on a home or if they don’t have the connections that are sometimes necessary to help get your offer accepted?
It’s always important to consider not only what you’re saving, but also what you may be losing – whether that’s an opportunity to purchase the home of your dreams
What If Something Goes Wrong?
What if your friend or family member doesn’t do a great job? How would you handle an awkward conversation about their performance? How would firing them impact your relationship? Consider very carefully how valuable the relationship is to you and whether you’re comfortable with risking it if the transaction doesn’t go as you’d like.
Will Your Friend Give You A Reality Check If You Need One?
You may not like hearing that the list price you want for your home is too high or your offer on a property is too low to even garner a response, but it’s your agent’s responsibility to give you the honest truth. Discussions about budget, pricing, and finances may also be someone you view strictly as a professional, rather than as a friend or golf buddy.
What Factors Should I Consider Before I Hire A Friend To Help Me Buy or Sell A House?
Whether you hire your friend or family member or another Realtor to assist you, make sure you do your homework and hire someone well-qualified to represent you.
- How much experience do they have? Did they just get their license or have they been in business for a while?
- Full-time status? It is in your best interest to hire an agent who acts as a full-time Realtor rather than one who sells homes on the side and won’t be available for the myriad tasks and phone calls that need to be handled during the regular workday as well as outside of normal business hours.
- Marketing Plan – What type of marketing strategy does the Realtor have to get your home sold?
- Track record and negotiating ability – How many homes has the Realtor sold in your area? What’s their list price to sales price ratio? What about the average days on market? What is their pricing and negotiating strategy?
- Support – Does the Realtor work alone or have a support team in place, ensuring that you receive great service? If they have a team in place, who will you be working with?
- Community feedback – What do other, unrelated people have to say about the Realtor’s service? You can check reviews on Yelp.com, Zillow.com, and Trulia.com. If the Realtor has been in business for more than a year and has no online reviews, that may tell you something about their service.
If you want to hire a friend or family member as your Realtor, make sure to ask lots of questions up front and be very clear about your expectations and the transaction. If your friend is a top agent in town, full-time, and has the stats and sales and reviews to back them up, hiring them could be a great idea. But make sure you have a plan in place in case you discover it’s not a good fit. And if you determine that you’re not going to hire the Realtor you were considering, a true friend will understand if you pick someone who has all the best qualities you need to assist you with buying or selling your most valuable financial asset.
If you’re considering buying or selling a home in Long Beach, Lakewood, Signal Hill, Seal Beach, or surrounding communities, we’d be happy to assist you.