There are over 425,000 licensed real estate agents & brokers in California and if you are planning on buying or selling property here you are likely to be working with one of them. In addition to the objective criteria people use in deciding who to hire, many rely on a friend or family member when it comes time to hire a realtor.
Of course, if you are reading this far, chances are you are my friend so I’ll cut to the chase. If you work with me you will enjoy all the benefits of hiring a friend and none of the downsides. But what are the pros & cons of relying on a friend as your agent?
Your realtor friend knows you, likes you, and in most cases will work extra hard for you. Your friend will most likely tell you the truth and look out carefully for you and be much more sensitive to the potential problems that could arise. And you know them as well; you know if you can trust them if you respect them, and you know how much they know about real estate. Hiring a real estate agent is a huge leap of faith and the stranger agent could be much better at selling themselves than practicing real estate. But there are questions to ask yourself before hiring your friend.
The first question you should ask yourself when considering hiring a friend as your real estate agent is are they qualified for your particular need? Are they capable of helping you navigate the transaction? Are they associated with a quality brokerage?
Even newbie agents can be a trusted advisor. My first client was a long-time good friend and although I was a new agent, they trusted me to help them. I demonstrated that I deserved that trust by bringing in the necessary expertise. I shared the listing with an agent that had over 30 years’ experience.
Does your friend know about the local real estate market? Your friend does not have to be the neighborhood expert (or condo expert, trust sale expert, etc). but they should be able to demonstrate a good knowledge of your situation, the areas you are buying or selling in, and the particular issues you are facing. But don’t fall into the trap that you must work only with the neighborhood expert. That designation is a marketing ploy and, in my experience, can result in less than the favorable outcome for the client.
Are you OK with your friend knowing a bit more about your financial situation than they currently do? There is a lot of hype over this element of the relationship. Yes, your agent will have to know how much money you have in order to complete the cash portion of the transaction, but outside of that, she will not be privy to all of the financial information you share with your mortgage lender. And again, if your friend is trustworthy, then wouldn’t that knowledge be safer in your friend's hands than in strangers'?
Be prepared that the relationship could sour as a result of something going wrong during the transaction. If both the agent and the client are upfront about this and more importantly clearly communicate their expectations, the relationship should survive any bumps in the road encountered during the process. From the realtor’s perspective, not choosing them to help you will also put strains on the relationship. All good agents have had friends choose another agent over them and there may be a good reason to choose someone else. But it will likely hurt your real estate agent friend's feelings to just suddenly announce to them you are planning on working with another agent.
People have so many misguided perceptions of how real estate works, especially around what a good agent does. One of the most important things I have learned in my career as a Realtor is that many real estate agents dispense advice that is dubious at best and in many cases benefits them over their clients. The real benefit of having a true friend as your realtor is that they will likely provide advice that will benefit you, even at the expense of their commission.
My advice is to go with a real estate agent you know and trust, over the one who is unknown outside of their marketing efforts. However, you may have more than one friend who is a real estate agent. In that case, you may want to select a non-friend in order to keep the peace. But if you are selling your home, you could offer one the opportunity to handle the listing and the other friend could handle the buy side. In any case, in my opinion, you are best served when served by a friend.