When deciding to buy or sell a home, many of us have friends or family that are already in the real estate business. We have cousins and uncles and brothers and sisters and neighbors and third cousins of your mom’s friends or whatever, that are in the real estate business. They sometimes can get a little sore if you don’t use them. But let’s think about that logically. It’s really not about the opportunity to help and serve you.
It’s really about the opportunity to make money off your purchase. Hiring your friend or family is not necessarily about the best option for you, the best opportunity to receive the highest level of service. It’s really about the opportunity for someone you know to put their real estate license in practice and then to earn a commission off whatever you need them to do, whether it is rent, buy or sell. So, hiring a friend or family in any part of the transaction, whether it is a buyer agent, listing agent, mortgage officer, friend of a friend on the attorney side, I would caution you – that is not always the best choice.
Hiring a friend or family in any part of the transaction,… I would caution you – that is not always the best choice.Sometimes deals get very complicated. Sometimes the negotiating doesn’t always go the way that you’d like. That, first of all, can tend to sour the relationship. The second concern is whether the person close to you or related to you is giving you the maximum amount of effort, or are they just looking at you as an easy paycheck because you’re buddies? I’ve always made it a practice NOT to work with family and friends. I’ve had several family members and friends buy homes in and around me, and that’s just ok. Some parts of the friendship do not need to be shared. For example, their deep personal finances or their credit scores, or their living conditions or their deeply held preference regarding what a house should or shouldn’t look like. It’s not a requirement when you jump into the real estate market that you have to reach out to your buddies. And if that buddy is mad that you don’t use them for the real estate transaction, you really should ask why. Is really all just about the money? Or is about the fact that you didn’t trust them to help you with the purchase? It could upset some people, or it could not. The key to that is being up front about what you need, and if you do have a friend or family that is able to help you, have a conversation with them before you get started. For example, “This is what I’m looking for. Are you able to meet my expectations? Do you know what I’m looking for? Are you equipped to help me to the best of your ability? Am I going to get the best amount of value, time and resources from your help, or are you just looking at me for cheap, easy commission?” That’s really how you need to separate it.
When buying a house, I wouldn’t skate. I wouldn’t use the free path or the path of least resistance. A referral is okay. A referral is different than friends and family. But if you have a friend or family member who you think may get hurt because you’re going to involve yourself in the real estate transaction or real estate market, then you might want to talk to them upfront just to set the guidelines and make the proper decision for you.