Risk of Using Friends & Family As Your Real Estate Agent

By Michael Repka, DeLeon Listing Team

When I originally got my real estate license many years ago, a manager pulled me aside and gave me what she considered wisdom. These words were really powerful because they clearly showed me what’s wrong with the real estate industry.

First, the manager explained that new real estate agents must set aside any insecurity about not knowing what they’re doing. I was told that no one ever knows what they’re doing at the beginning of their career and that I should actively and vocally tell all my friends and family that I am a Realtor®.

The rationale was simply that friends and family are more understanding of an agent’s lack of knowledge and experience. Further, it is very unlikely that your friend or family member will sue you if you make a mistake.

From the moment I heard this advice, I could see the problems within the real estate industry. There was a remarkable lack of emphasis on the importance of actually gaining knowledge or competency. While I expected the manager to explain the need to thoroughly understand the contract, negotiation strategy, ways to avoid conflicts of interest, and the local housing inventory, what I received instead was instruction not to be a “secret agent.” Further, she emphasized that I should make my friends and family feel obligated to use me by asking them to promise that they will do so when the time comes to sell.

Over the years since, I have heard several phrases over and over again from various real estate agents.  These include: “Fake it until you make it”; “It doesn’t matter how much you know… it only matters how much the client thinks you know”; “don’t be a source of information… be a conduit of information”; “Never give advice or your opinion… Just give information and let the client make the determination”; and “Never summarize disclosures or do an investigation of your own.”  All of these sayings or instructions illustrate the brokerage’s focus on avoiding liability at the expense of the clients’ best interest.

As the most active listing real estate agent in Silicon Valley, I see a wide variety of agents through home showings and the offer process. Over the years, I have noticed that many clients are represented by extremely professional and knowledgeable agents that are truly looking out for their best interests. However, when I encounter an agent at the other end of the spectrum, I often come to learn that they are a friend or family member of the buyers.

It is undisputed that good agents have friends and family members too. So, it would be overly simplistic to assume that you should never work with a friend or family member. However, both buyers and sellers should carefully consider which agent is the best for them. Buying or selling a home is a very important transaction, and it should be taken quite seriously. Before deciding to work with a friend or family member simply because you know them, you should ask very detailed and comprehensive questions to ascertain their level of competency.

Another touchy area is that it is extremely difficult, if not impossible, to fire a friend or family member.  Even when Sellers are extremely disappointed with the performance of their agent, they may find it difficult to complain or switch agents at the end of the listing period.

Interviewing friends and family members may make sense, but a wise client should also interview other agents to make sure that their friend or family member would truly be the best choice for such an important transaction.