Those of us who are working as real estate professionals need to accept that these days nearly everyone will have a friend or close acquaintance that also works as a realtor. Wish as me might that that weren’t true, it simply is most of the time. It’s a popular profession choice these days, and especially in places like Toronto and Vancouver where the premise of potentially lucrative earnings draw many to the business.
Here at Real Estate Leads, our online real estate lead generation system has been a big success right across Canada with realtors like you. That’s not surprising with the way it allows you to add to your prospecting efforts and increase your reach, but today we’ll give you another perspective you can share with anyone who thinks they’ll be best served by going with their friend as their realtor.
While it’s perfectly natural to consider it, many times those folks will find that – while their loyalty is admirable – they haven’t really made the best choice when it comes to selecting someone to guide them along as they make such an important purchase or sale.
With that understood, let’s look at 7 reasons why it’s not always advisable to go with your friend as your realtor.
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They Might Not Be Enough of a Neighbourhood Expert
Having a strong understanding of geography and local knowledge is important as they relate to the housing market. Any prospective buyer or seller should be working with someone who knows the ins and the outs of THAT specific real estate market. If a friend or acquaintance in the business doesn’t typically serve that region, that’s going to put you at a disadvantage – plain and simple.
Why is that?
Local agents will have built up a roster of neighbourhood-specific clients, meaning that if you’re looking to sell then that agent will likely already have a number of potential buyers on tap who are interested in properties in the neighbourhood.
Agents who don’t have this familiarity don’t have the same advantage, and have to invest more time to prospect clients who would be interested in buying in your neighbourhood.
Alternately, anyone looking to buy in a particular neighbourhood will benefit from how a local realtor will have an idea of how many homes have hit the market recently, what inventory is like and again he or she may perhaps have clients listing homes that fit your needs and wants.
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Part-time real estate agent?
A good number of realtors operate on a part-time basis, being of ‘many hat’s with other careers too much of the time. This is particularly true in hot markets, where booming prices have led to intense growth in the number of realtors looking to get a piece of the pie. For example, in the last ten years the number of realtors operating in Toronto has jumped from 20,000 in 2004 to 40,000 in 2014.
So if you’re thinking of hiring a friend or family member, you need to determine first that real estate is where they put the bulk of their focus on professional development and excellence.
Part-timers will put less time into your home buying and selling efforts, and that can mean having your dream home slip through your fingers or your current property sitting on the market far longer than it needs to. These part-timers will be budgeting their time between multiple jobs, and that may also make for availability / response-time issues.
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‘Friendly’ rather than professional advice
Some might think that your realtor being a person you’ve known for years as a friend will be an advantage, but you’d be surprised just how often the opposite can be true.
Why is that?
The nature of common friendship dynamics can cause tension during house hunts or sale marketing. Further, it’s not uncommon for personal boundaries to be crossed as compared to a more professional relationship with an agent with whom you have no connection but who will provide more concrete and unbiased advice.
Rather than treat you as a client, a realtor friend or family member may see themselves as equal partners with some measure of the same footing in the decision-making process.
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House Hunts May Become Too Casual
Your agents will be working for you, and understand that they will be taking both THEIR time and YOUR TIME into account, along with a more exclusive focus on reaching the goal in an objective period of time
When friendship comes into this picture, the lean client-first approach can dissolve quickly. For example, important questions about negotiating prices can begin to overlap with weekend gatherings, or be squeezed in-between a night out with the friends. Valuable time may end up being spent on a little more time enjoying chats and drinks over lunch.
You get the idea.
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Your Friend May Not Give It to You Straight
Sometimes the offer you’re making on a home is far too much of a lowball. Sometimes your budget is going to be unrealistic based on market conditions for certain types of homes. Sometimes you’re overlooking key considerations that aren’t immediately apparent.
These situations require someone to really tell it like it is. A realtor that is your friend may opt to keep their mouth shut in the interest of not dampening your obvious enthusiasm for buying a home.
This can be particularly true when it comes to money matters, where discussions regularly revolve around incomes and budgets. When it comes to those more personal-finance related factors, you want to be speaking to a professional who has nothing to sway their judgment and will ‘give it to you straight.’
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House Hunting Can Lead to Strained Friendship
There’s an old saying that money and friendship don’t always mix well, and it can be very true in this context. While you and your realtor friend may get along as well as you always have, their approach to business may be completely out of line with yours and you’ve never had any previous means of determining that.
This can be particularly true when entrusting them to guide you in buying a new home. It’s a massive decision with significant financial repercussions if it goes wrong.
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Better Deals Potentially Had Elsewhere
Many people will choose a friend as their agent for a financial incentive, and most commonly in the form of a discounted commission rate. Often times, however, people will make the assumption that they will be presented with a lower commission rate on account of the fact they are working with a friend.
The expectation can exist even with nothing to suggest it beforehand. That can lead to some resentment and tension if the friend / agent hasn’t been thinking along the same lines.
Keep in mind that a number of full-service real estate brokerages offer incentives that could outdo anything a friend might offer. Not suggesting they’d receive the same level of service, but they might and as a whole it’s not good to make ANY type of assumption based on what an individual might expect from their ‘friend.’
It’s important for people to take all these factors into account if they’re evaluating whether or not they should work with a real estate agent friend or family member when buying or selling a home.
Sign up with Real Estate Leads here and receive a monthly quota of online generated, qualified buyer and seller leads delivered to you exclusively for your also exclusively-protected region of any city or town in the country. It’s a great way to supercharge your prospecting efforts and give you many more potential clients.
