It is commonly said that you should never do business with family… but what about with friends? When using a friend for business you are making a very big commitment. If things go sour, the friendship almost always goes with it and that’s a lot to put on the line. It is easy when buying or selling your home to think your friend is the obvious choice but without checking their credentials you could be in for a rough ride.
When using a friend they are often doing you a “favor” so you rely on and trust their opinion to a point where you almost forget you are making the biggest financial decision of your life. One of the primary complaints is that people often feel they cannot say their honest opinion in fear that they will hurt their friend’s feelings but when buying or selling a home you need to be completely open and honest with your realtor or else you can end up making the wrong decision.
I recently had a home for sale in Oakville and during one of my open houses a family who lived down the road came in and loved the house. They viewed it several times during that weekend and I had been in contact with them throughout the week. After five days they informed me that they would be going through the home with their real estate agent.
I was a little taken back when they told me their agent lived and worked in Newmarket but they had been friends since university and felt they were better protected having him represent them. The agent was a great guy, but he didn’t know the local market which resulted in them paying more for the home than they would have if they bought it directly with me.
To add more salt to the wound they used that agent to sell their home, which took almost two months to sell and required two price drops. Had the agent known the local market and been a part of that real estate board he would have been able to guide his clients toward a price that was much more reflective of the market. Although the best of intentions were there, it was very difficult for someone who knew nothing about Oakville to show and sell the property to prospective buyers as well as effectively communicate with local agents.
The agent would have done his clients justice by letting myself or another local realtor handle the listing and taking a referral fee. Since this transaction the agent has given me two referrals in the Oakville area because he knows it is in both his and his client’s best interests to have a local realtor act on their behalf.
Here are some key questions to consider before hiring a friend:
- Are you willing to put your friendship on the line? (believe me, it can happen)
- Have you interviewed other agents? When selling your house it is important you get different opinions of value and hear what other people bring to the table in terms of pre-listing and marketing strategy.
- Are they active within your local market? If you are selling your home in Toronto you shouldn’t use your university buddy who lives in Ajax.
- Is your friend a full-time realtor with successful results? If your realtor is part time you will often be catering to their schedule. You need somebody who lives and breathes the industry and can negotiate on your behalf, not someone looking to make a few extra bucks on the side.
- Can they put you in your place? Sometimes you need to hear a little tough love and just as easily as you don’t want to hurt your friend’s feelings, they don’t want to hurt yours. Someone needs to be able to call bullshit every now and again.
Without a doubt using a friend can have many benefits and provides a level of trust and comfort. Majority of my business comes from friends and referral and as thankful as I am for every one of them but I am always aware of a situation where it is best to refer the business. I love my friends and I am sure you do too, so make sure you weigh out all the pros and cons of using a friend.