Chatting with a potential buyer only to have them divulge to me at the end of the conversation, “well, we’re going to have our nephew be our agent but thanks anyway.”
This happens all too often and unfortunately, the buyer or the seller in the case of the listing, may not be getting the best service they really need. Sure, you want to give your family member or friend the benefit of the doubt and help them get started in the real estate career, but unless they are the best person for the job, going with them simply because you are related to them or you happen to know them, could cost you thousands of dollars and a lot of stress.
I have spoken to a lot of people that say they are going to go with their part-time a real estate friend or family member but because they don’t know much, they’re going to use me and ask me all the questions. Do you see the hypocrisy in this? Why should I do all of the work when someone else actually gets the commission check?
Here are five good reasons why it’s not a good idea to sell or buy a home with a family member as your agent.
#1. They may not have the right experience.
Experience in this industry matters big time. Because I’ve been doing real estate for decades, there’s much more to the experience side than just book knowledge. Yes, we need a formal education and we must pass a test, but nothing beats actual, boots on the ground experience in real estate transactions. Every transaction is different and without that experience, they may not know how to handle certain situations. Trust me… experience is invaluable.
#2. Your family member may not know your market.
Most of the time people that want to use a friend or family member are nowhere near that acquaintance. The agent may be several cities or even counties away and has no idea what the current market trends in your neighborhood or community really are. If they’re not familiar with the local real estate market you may be underpricing or overpricing your home or you could end up paying way more for a house then you should be. Consider this, we are talking hundreds of thousands of dollars here; would you let this person potentially lose this money for you?
#3.They may not be a full-time agent.
Most real estate agents don’t start off being full-time agents. It costs a lot of money to become a real estate agent. Classes, tests, licenses, marketing materials, and ongoing education costs a lot of money and most people need to have another job until they get their business underway. That being the case, for some reason you need to see the house right away or you need to list and sell your house and have an offer coming in but your real estate agent is working their other job, you may lose out on a house or on an offer. It’s important to get a real estate agent that works full-time so there working for you, and not anyone else.
#4. Do you want them to know everything about you?
The real estate business is very personal. Agents and lenders will know a lot about you. That may be fine for a business associate but not for your family member. Do you want them knowing your finances, how much you make, how much you spent on a house or how much you need to make on a sale to balance your personal budget? This might be information you don’t want these people knowing especially if they have loose lips with the rest of the family.
#5. It could cost a relationship.
Keeping things business-related is one thing; blurring the line can get muddy. I’ve known situations where the family member agent didn’t do their job properly and the parties haven’t spoken since. What if the agent costs you money? What if you lose a home because of something they did? What if you sit on the market for months with no bites? How will this affect your relationship?
There are just too many negatives when it comes to hiring a friend or family member. Unless you have a relationship with them that can withstand some awkwardness AND they are a full-time, well-experienced agent in your market, it’s best to not rock the waters. Of course, NOT going with them could cause problems too but in the end, it may be less hassle going with a professional than hurting their feelings a little.