Consider this BEFORE Using a Friend or Family Member as Your Realtor
A home is likely to be the biggest purchase you make in your life. But, as you know, a home is more than just a monetary commitment. It’s your own personal sanctuary, a place to watch your kids grow and learn, and an investment in your future. So, it may seem like a wonderful idea to use a friend or family member who’s a realtor to help you find your next home. But is it?
Selling your home can be an emotional roller coaster. You want the best price for your home, yet you have to navigate a fair closing date, inspection, and transition to move. Surely, a friend or family member that’s an agent has your best interest in mind, right?
Choosing the best realtor for your needs can feel overwhelming. So, using a friend or family member may feel like a no-brainer, since they know you personally. However, agents that are either friends or family can further complicate the buying or selling process.
Should you use a friend or family member who’s a realtor? Here’s what you need to know:
Why Do Some People Decide To Use A Friend Who's A Realtor
Ultimately, buying or selling a home is a huge decision. It's important you use a realtor you trust, and who better to trust than an old friend?
For some people and some situations, a longtime friend or relative is a great choice as your realtor. Yet because home buying and selling is such an involved process and big decision, there are some things you will want to consider before committing.
When Should You Use A Friend Who's A Realtor
If they are experienced
The first thing you want to decide is if your friend is an experienced realtor versus a part-time realtor. The more experience and more dedicated to the profession, the smoother the process and more insight they will have. Going with a realtor that is less experienced could cost you the sale of your current home or the purchase of your dream home in a competitive market.
How can you tell if your friend is an experienced realtor? Look up how many transactions they have completed in the past 12 months. Using Zillow, you can see how many homes the agent has helped buy or sell. If your friend has less than 12 transactions in the past 12 months, it's likely they're an inexperienced or part-time agent. You can also look up reviews of their services online.
If you trust them
Because buying or selling a home is a huge process that involves a lot of time and money, you have to trust that your realtor is working in your best interest and actively working for you. It goes without saying that if you don't trust someone, you probably should not use them to buy or sell a home.
Trust is likely the strongest reason you are considering working with a friend or relative in the first place. Keep in mind that people change, so be sure you have established trust with your friend if you’re considering them as your real estate agent.
If you don’t mind them knowing about your finances
Buying or selling a home involves transparency of your personal finances. This can make some people feel uncomfortable and increase the anxiety of buying and selling. Discomfort is more often the case when it comes to disclosing your finances with family members, including in-laws.
However, if you’re open to your friend or relative knowing about your finances, that shouldn’t be a problem.
If they are willing to give you a discount on the commission
Who doesn't love a discount? If your friend is willing to give you the "friends and family" discount and reduce their commission, then that's great! You will save quite a bit of money.
However, you always want to compare how much your fees will be compared to a low commission rate. At Felix Homes, we only charge a 1.5% listing commission, so you can say that all of our clients get the "friends and family" discount (in addition to receiving the very best experience).
When Should You Not Use A Friend Who's A Realtor
If they are a part-time or new agent
So, you looked up your friend’s reviews and past sales, and they’re not as experienced or successful as you expected. Well, let's face it, getting your real estate license isn't the most difficult achievement in the world.
They may be like most real estate agents that decide to get their license and work their "circle of influence" to get a few transactions under their belt and some extra cash in their pocket. Don’t take it personally that they turned to you. And don’t feel pressured to use them.
If your friend is either a part-time agent or a newly licensed agent, it may be best to find someone with more experience. Working with an inexperienced agent on what is likely the biggest purchase or sale of your life can open you up to legal and financial trouble.
If they aren’t familiar with your neighborhood
Real estate is a local business. If your friend isn't familiar with what makes your neighborhood unique, then how will they be able to effectively market your home? Furthermore, how can they find you a home in a neighborhood that fits your needs?
The last thing you want is to waste your time looking at houses in areas you have no interest in. And an inexperienced agent that’s unfamiliar with the local market may significantly under or overprice your home.
Before committing to a realtor, ask them questions regarding the neighborhood, including how many homes they’ve helped buy or sell in the area. You can also use their Zillow profile to note where they’ve helped past clients buy and sell.
If you don’t like to mix business with friendship
One of the biggest pitfalls of using a friend or family member as your agent is that you wind up stirring business into your personal relationships. This can get messy. Consider how you may react if you’re unhappy with how the process unfolds. Would you feel confident telling your friend/agent your concerns?
Furthermore, you don’t want to ruin your relationship with a friend or relative if your real estate transaction starts to go upside-down.
If you don’t want your friend knowing your personal finances
Again, take some time to consider how invasive real estate transactions can be and decide how comfortable you are with a friend prying into your finances. When it comes to qualifying for a mortgage, the most minute financial details may come to light. Of course, these details are shared in confidence between realtor and client, but this takes on a whole new light when your realtor is a friend or family member.
If you’re hesitant or unsure of how you feel when it comes to disclosing bank statements and other financial information with your friend, you may want to look elsewhere for your agent.
How To Use A Friend Or Family Member As Your Agent Effectively
If you are absolutely comfortable working with your friend as your agent, be sure you approach the situation strategically and in a smart way. This can reduce the risk of a falling out or bumps in the road.
Clearly define your budget, wants, and needs, and timeline
Sometimes friends may feel as if they can push you beyond your budget. Be sure to make it clear that you do not have wiggle room if that’s the case. Furthermore, friend-agents may fall into the problem of putting your needs on the back burner in order to work more diligently for other clients. Be sure you outline your expectations to prevent this from happening.
Watch out for the friend that thinks they know what you need better than you do. For example, your friend may keep showing you homes with pools, yet you have no interest in the upkeep of a pool. If you notice this happening, be sure to verbalize your concerns.
How To Tell Your Friend You’re Using A Different Realtor
A true friend will act in your best interest. They will also understand and support your needs, even if it means using a different agent.
You should talk to your friend about your decision if they’ve asked to help you find or sell a home. Be gentle but don’t go too deep into detail–no one wants to hear, “I’m sorry I don’t trust you.” However, saying that you prefer to keep business and friendship separate is understandable.
Choosing The Best Realtor For Your Needs
When it comes to the best agent for you, trust yourself and weigh your options. Consider commission rates, past reviews, experience, how well you truly know your friend, and if they’re local. Take your time, do some research, and talk through the process with a third party you trust.
Learn more about why Felix Homes has been a trusted choice for home buying and selling in Tennessee.