It’s not unusual for real estate agents to say that they don’t like working with friends. The rationale I hear is that they prefer to keep their business and personal lives separate. They have heard too many horror stories about friendships going bad over a real estate transaction. To that I say, “Get over it!” Why in the world would you want to cut out your best client base? Granted they may not work with you at the beginning of your business, but over time you could be missing out on a great deal of business.
The Biggest Mistake Agents Make
The single biggest mistake real estate agents make when it comes to working with friends is not treating their friend like a client. When working with a client you do the following:
Meet with them for the sole purpose of reviewing the home buying or home selling process
Present scenarios as to what can happen during the process
Explain to your client that there will be some “bumps in the road”, but most can and will be resolved
Talk about how much money they will need
Outline their responsibilities throughout the process
Discuss in detail what role you play during the transaction
Discuss form and frequency of communication
Make sure your client understands all of the time frames associated with the transaction
Discuss the liability involved in buying and selling a property
As their friend you have a different role to play than that of their real estate agent. It’s important to talk about your role upfront to prevent hurt feelings or miscommunication further along in the process. Let them know what you will or will not be doing during the transaction. Tell them that you will be treating them as a client when you are meeting, looking at property, writing the offer, reviewing an offer and during the negotiation. Let them know that you don’t have to know all about their finances in order for them to work with you. Their lender can review all of the necessary documentation and provide a pre-approval letter without you knowing a single thing about their finances. This can be extremely reassuring for many friends.
Don’t Assume Anything
It’s easy to assume that buyers and sellers know about the process because of the exposure real estate receives from reality television. But you need to remember that real estate is hyper-local. In most cases what they see on television doesn’t work in your market. They need to know that upfront. Take the time to outline the steps and the possible pitfalls they will experience during the transaction. Help them understand how much money they will need upfront for the earnest money deposit, the appraisal and the various inspections. Let them know in dollars how much they will need to bring to settlement. No one likes surprises…especially when it comes to their money. Lastly, review some of the “bumps in the road” that occur between finding the perfect house and going to settlement. Many times your clients will feel like the “bumps” are a sign that they shouldn’t move forward with transaction, while in truth, virtually every transaction has a “bump” or two and they usually get resolved in time for settlement.
Communication is Key
No matter how many times your friend/client has purchased a house or sold a house, the process can still be quite stressful and the process changes all the time. Let your friend/client know when they can expect to receive updates from you. Even when nothing has changed, tell them. No news is news. When phone calls and emails go unanswered, people start to speculate as to what is going on, that’s just human nature. Nine times out of 10, they think the worst. In the absence of information people, myself included tend to leap to the worst case scenario. It’s much easier to send an email stating that you are still awaiting an update on “xyz”. Everyone is anxious and needs reassurance that the transaction is progressing towards the settlement date, don’t add to their anxiety by not following up or communicating with the parties involved. A real estate agent’s job job doesn’t stop when the offer is accepted…that’s when the real work begins.
Don’t Make It Harder Than It Is
Real estate agents have a great deal of responsibility and liability. As real estate agents we have the wonderful job of helping people buy and sell property and juggling all the people associated with a real estate transaction. We encounter difficult people and difficult situations all the time, but what we don’t have to do is create difficult people and situations. We have the opportunity to educate the consumer so they have a great real estate experience. Working with friends and family members should be welcomed with open arms. The key to success when working with family and friends is to deliver the same five star treatment you give all of your other clients.
Enjoy less stress by having smoother transactions by implementing these simple strategies today!
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As an active Realtor licensed in three jurisdictions, I approach real estate training from a different perspective. With over 18 years in the real estate business, I teach agents what it’s really like to be a real estate agent.