We all know a realtor. In fact, we all know multiple real estate agents. And while it’s always good to know someone in the industry, the truth is that having an agent in your close circle of friends tends to complicate things more than help.
4 Reasons Not to Hire a Friend as a Real Estate Agent
There are thousands of real estate agents in every state. Chances are, you know a few of the ones in your community. But here are four specific reasons why you shouldn’t hire any of them.
1. Lack of Experience and Expertise
You should choose an agent based on the type of property you’re buying/selling and the neighborhood you’re located in/targeting. You should not choose an agent based on how close you are to that individual. Doing so will cloud your judgment and prevent you from making a wise decision.
While it’s possible that you know an agent who has a ton of experience in your particular neighborhood or niche, it’s much more likely that they’re a generalist. It’s also possible that they’re relatively new to the industry and/or only do real estate on a part-time basis.
Whatever you do, you don’t want someone representing your most important financial transaction as part of a side hustle designed to make them some extra pocket change. (You wouldn’t let a part-time doctor operate on you, would you?)
There are certain discussions you’ll have to have with your real estate agent that you probably don’t want to disclose to a friend. We’re talking about very specific details about your finances, job, and living situation. Sometimes it’s better to have these discussions with a stranger who is removed from your family’s personal life.
3. Biased Recommendations
It’s common for friends to be blinded by what they know (or think they know) about you. This can cause them to steer you in a particular direction.
For example, you might be interested in a fixer-upper. However, your friend knows that a fixer-upper is going to eat up a lot of your time and could lead to issues down the road. So in an effort to “help” you, your friend becomes selective with the types of properties they send you.
While that’s a blatant example, this also occurs on a more subtle level. Your friend may unintentionally say and do things that they think are best, but that actually compromise their ability to serve you in an objective manner. A stranger, on the other hand, will avoid “over” filtering things for you.
4. Compromised Relationship
It can take years to build a relationship, but just a few minutes to destroy one – especially when large sums of money are involved. While it’s possible that your friend could lead you through a smooth and profitable transaction, it’s much more likely that there are snags and difficulties. And when you know the agent personally, it’s much easier to place blame on them. This can create unhealthy friction in your personal relationship.
“It may be tempting to work with a friend or family member because you want to help them out. Just remember: You’re not helping anyone if the relationship turns sour or you lose thousands of dollars,” Ramsey Solutions mentions. “It’s better to hurt their feelings by not listing with them than to completely ruin the relationship over a stressful transaction.”
Ask yourself if it’s worth risking the relationship just to avoid hurting feelings. In most cases, it’s not. If you take a step back and analyze the decision, you won’t have any trouble reaching this conclusion.
A Better Way to Find a Real Estate Agent
The good news is that you don’t have to choose a friend as a real estate agent. There are hundreds of other options in your city (and many of them are more qualified to handle your transaction). As you search for an agent, we recommend eliminating the dynamic of a pre-existing relationship and hiring someone based on their credentials instead.
You’ll know a good agent by their track record of past sales, their experience, and the way past clients feel about them. Review their website, study their reviews, and take to Zillow to review their past listing activity. As you gather information, you’ll begin to separate the contenders from the pretenders. At this point, it’s wise to sit down with three or four different agents and “interview” them to see if they’re a good fit.
There’s no foolproof way to hire a real estate agent, but this approach tends to yield better results. If nothing else, it prevents you from hitching your wagon to someone simply because they’re convenient. Try this method and you’ll like the results.