Should You Hire a Friend as Your Real Estate Agent?

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By Susan Johnston

As the spring house-hunting season approaches, many Americans will be buying or selling a home -- and some will enlist the help of a friend or relative who happens to work in real estate. But experts caution that hiring a friend as your real estate agent could backfire.

"Realtors tend to be a social bunch," says Jon Sterling, who manages a team of agents for Keller Williams Realty and specializes in working with real estate investors. "I can't say never hire a friend, but you shouldn't hire them because you're a friend. You shouldn't do it as a favor -- you should do it because they're good at what they do."

In some cases, people find that it's easier to hire a friend than invest time interviewing several agents. In fact, a 2014 survey of nearly 300 sellers from the Redfin Research Center found that over a third evaluated only one agent before choosing one to list their home.

Before you hire a friend as your agent, here's a look at potential pitfalls to consider.

1. Your friend may not know the neighborhoods that you want. Whether you're buying or selling a home, you need an agent with intimate knowledge of the market in that specific geographic area. "I always get calls from cousins saying 'Oh, you live in Florida, I'm thinking about buying a property in West Palm Beach,'" says Karyn Glubis, a real estate agent based in Tampa. "They assume that you know everything, and even if you live in a certain city, there's several different areas of the city. I live in a certain ZIP code that I know with my eyes closed. If you ask me to go away from Tampa to [St. Petersburg], I don't know that area."

According to Mia Simon, a Redfin real agent based in California's Silicon Valley, it's important for buyers or sellers to instead look for "someone who really has the local knowledge, the relationships with the main players and a really good grasp of the inventory."

2. Your friend may think she knows what's best for you. If you want a downtown loft and your friend pictures you in a suburban bungalow, it's bound to create tension. Glubis ran into this issue when she helped her father shop for a three-bedroom townhome and he wanted a move-in ready property, while she showed him fixer-uppers. "He's like, 'I am 68 years old. I don't want to fix up a house,'" she remembers. "People think they know what you deserve or what you want. A friend doesn't have the boundaries that a client would have."

Glubis has her clients fill in a "needs and wants" list (for instance, "I want an oak tree in the backyard, but I'm not crazy about hilly lots"). However, she didn't take that step for her father because she assumed she already understood his needs and wants.

Another potential pitfall is if you're buying an investment property and your Realtor friend doesn't educate you on the responsibilities of a landlord because she assumes you've already researched it.

3. Your friend may put in less time. A friend helping you house hunt may not want to spend every weekend driving you around instead of working with other clients. That would put the onus on you to search listings and do the legwork. "You're on Zillow and Trulia doing all your own research," Glubis says. "You're telling your friend what you need. The friend is more casual in their searching, making you do all the work."

4. Your friend may not give you a reality check. You may not like hearing that the list price you want on your home is too high or your offer on a property is too low, but it's your agent's responsibility to give you the honest truth and serve as an objective outsider. "The competition [in Silicon Valley] is so fierce that you're having to waive all contingencies and go way above list price. Having to advise a friend to do that could jeopardize a friendship" says Simon, who has never represented friends but will refer them to another agent on her team.

Discussions about your housing budget or the amount you're willing to accept for your home might be more comfortable with someone you see strictly as a professional, not as a neighbor or yoga buddy.

5. Disagreements could sour the friendship. "When things go bad it really gets ugly, so Thanksgiving dinner could get weird if you're in the middle of a really tough transaction with friends or family members and the lines start to blur between your personal life and your professional life," Sterling says. "I don't ever want to put my friendships at risk because of a business transaction." Like Simon, he'll refer friends in the market to other agents he trusts who could better fit their needs.

Another sore spot for real estate agents is when they handle a transaction for a friend and that friend asks for the commission back, which Glubis says can make things uncomfortable.

That said, there may be situations when a friend-real estate agent arrangement works out. "If the friend is experienced and treats you like a client, if they take their job seriously and know the market you're shopping in," Glubis says, then it could be the right fit.

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