Everybody has a real estate license. Or so it seems. Realtors hear it a lot when attempting to solicit a seller or buyer.
“You certainly know your stuff and I know you are perfect for my real estate needs, but my sister/brother/aunt/uncle/mother/father/cousin/best friend has a real estate license, so I like to use them. They would get upset if I didn’t.”
In some instances there is nothing wrong with working with someone you may know as long as both sides can separate the two aspects of the relationship, business/personal finances vs. social.
Sometimes, it is very difficult to tell those that you are socially engaged with your business because many times it is none of their business.
A realtor needs to know a lot about their clients when selling or buying a home in order to really service their clients. Why are you moving? What do you owe? Are you in a possible short sale situation? Is there a divorce situation? What improvements should I make to get my home sold? Are there permits on the home? Is there litigation on the home or any outstanding judgements? What price should I ask and what price should I sell it for? Why are you buying? What is your income? What do you qualify for? What is the downpayment? Where is the money coming from? What are your expenses? What is your credit score? What type of home? Which area? How many people will be living there? And on and on. Of which, by the Realtor Code of Ethics, much of this information is to remain confidential — always.
And of course the client needs to know if the realtor is from the area; do they know the inventory; what is the marketing plan; what is the buying strategy; is this your full-time job; why isn’t my home selling; why do I need to reach out to you, shouldn’t you be calling me, etc.
As a buyer or seller, and the agent, can the two relationships be separate or if either part does not work out can the other continue?
I was watching one of the Sunday morning news shows and Barbara Corcoran, the president of the Corcoran Group in New York, said it best when asked if one should use a friend or family member as I paraphrase, “If you had to, could you fire that person?” I found it hit the nail on the head. What if they weren’t doing their job as they should, would you still hang on with them to keep as not to hurt their feelings? (By the way, it does happen as some realtors believe it was a give-me and therefore, need not work as hard.) If it is just a business relationship, it would certainly be a lot easier to fire an agent.
On the other side of this quagmire is that friend/family member who is the realtor. They are in the same predicament. However, many get upset when they do not get the business. It may even affect the social relationship if they are not hired.
Conversely, it may also affect that relationship if they are hired and then possibly fired. A realtor should think twice about the social relationship if entering a business relationship, too. It is not easy to separate them. The realtor has to be able to keep confidential information from others in that social/family group. They must be able to tell their client family/friend what must be done to achieve their real estate goals. They must treat their family/friend client the same as they treat all their clients, and sometimes even work a little harder. It is a big responsibility to service the family/friend client.
Don't fret – there is a solution. If you feel uncomfortable not using that family/friend and yet want them to feel part of a transaction, compensation-wise , I suggest using what we realtors call the referral system. Have your realtor family/friend refer you to a colleague of theirs. It can be with the same company or if you do not feel comfortable with one in their office knowing your personal business, have it referred to another company in the area. And by the way, your family/friend realtor has the ability to refer real estate business anywhere in the world.
This allows you to keep confidential information and your business with a professional without leaving your family/friend from receiving any compensation and also keeps your friendship alive. It’s a win-win for everyone .