For many people considering selling and/or buying a home, using a friend or family member who is a licensed real-estate agent seems like the perfect situation. Perhaps it is the perceived trust and familiarity that tips the scales in favor of the friend or family member, or maybe not — maybe it is a sense of obligation. Before you hire a close friend or family member, carefully consider the possibility for dreadful consequences to occur. For the sake of brevity throughout this article we refer to f/f to mean a close friend or family member.
A quick side note: whenever we take a new listing, we generally get it sold very fast. So … in the interim, until we get another new listing, we often hold open houses for other agent’s listings — a common practice. At least half of the visitors to the open house are quick to tell us that they have an f/f who is their agent. Visitors apparently know to share this secret, thinking that if you tell an agent at an open house that you have a f/f working for you, then the open-house agent will leave you alone. Out of curiosity, we usually say something like, “Well, if your f/f is working so hard for you then why are they not with you today?” The visitor’s response is similar to, “Well, we saw the open-house sign so we decided to pop in.” To which we respond by saying, “Gee, this house has been on the market for about 100 days. Shouldn’t your f/f have recommended this property to you earlier?” Back to the problem. Trying to write a safe answer or suggestion to hiring a f/f as your trusted agent is very tricky. While we do not want you to challenge those bonds, we do want you to succeed at your goals without jeopardizing the relationship or losing opportunities. Before you hire that f/f, ask yourself this question: If this f/f was not your f/f, would you hire them? And … if your f/f does not perform to your expectations, could you or would you fire them? These are tough questions to answer, but better to consider them now.
It is a two-way street of awkwardness. If you are the seller, you might expect the f/f to cut their commission, which likely will not make them happy. If the f/f does not work as hard as you expect, you will likely be unhappy. As a buyer, you might find yourself doing all the work — searching the Internet and driving endlessly to open-house events and then enabling your f/f to get the commission. Before jumping to the decision, or being coerced by others to hire your f/f, consider whether they are qualified to get the job done for you. If necessary, interview them the same as you would any other agent. Convince yourself that your f/f has the knowledge, experience, drive, strategy and plans to sell your house and/or to help you purchase a next home.
Then, consider whether they have the impartiality to represent you fairly and objectively, and how you will feel by revealing to them some of your sensitive and confidential information. Oooops — didn’t think of that, did you? Will they be able to safeguard your personal circumstances and information, or are they the type to leak it to other friends and family?
By being your representative in a real-estate transaction your f/f will likely have some access to information about your bank account balances and other assets, credit scores, debts and liabilities, liens and judgments, income, ages and anything else you can think of. If you have no problems to trust and rely upon your f/f and if everything goes well, then you have made a good choice. However, the odds of that going without mishap are not a high probability. In fact, it is more likely that tension and ill feelings will emerge, if not to damage or dissolve the friendship or to create a long-lived family dispute. Without having an open and honest discussion, there may be as much apprehension on the part of your f/f. Perhaps they do not want to jeopardize your relationship, but are too concerned they might insult you by declining the opportunity. There is a sensible alternative for all parties, and one that could allow you to proceed expeditiously with your plans and yet avoid the potential of discord with your f/f. As long as all conditions are met, your licensed f/f can refer you to another real-estate agent who can provide expert service to you and, in return, through a referral agreement, your f/f can receive a referral fee.
With so many licensed real-estate agents in California, there is an extraordinarily high probability that you know more than one who is also your f/f. We urge you to carefully consider some of the cautionary thoughts we have presented and to factor them into whether to hire your f/f. And in spite of the cautions, if you decide you want to hire your f/f, perhaps you should have an open discussion with them to clearly determine how they feel. If you have any questions about real estate in San Diego, send your inquiries to http://www.WeSellLaJolla.com Charles Schevker or Natasha Alexander at [email protected]. They will respond directly to you, and those questions that have a broader public appeal will be published along with our next column in La Jolla TODAY.