The booming real estate market has attracted a lot of people that want to get their piece of the pie and it might feel like every third person you know is a REALTOR®. On the other hand, we, REALTORS®, need to have visibility. Yes, our faces are everywhere; from bus stops to stationary. According to the Real Estate Board of Greater Vancouver, there are more than 13,500 real estate agents who live and work in the Lower Mainland.
When I got into the business, you had a choice: you were either a REALTOR® or you were not. There were no part-time agents. The regulation changed several years ago, allowing REALTORS® to work part time. The design was to allow people to grow into the business and for people who wanted to retire, to do so while having some other activity. But it also opened a negative side: it allowed many part-time agents who do a couple of transactions a year and are not up to date on regulatory and business practices or the state of the market.
When the time comes to buy or sell your home, how do you choose a real estate agent? Do you choose your friend or do you go outside your personal network?
The cons of going with someone that is part of your circle
The old saying “don’t mix business with pleasure” might be something to consider in this situation as there are many horror stories of people that decided to go with a friend or family member when buying or selling their property. It is understandable that you might want to help someone in your circle. However you need to consider the possibility of things going wrong. Would you fire your friend if she or he weren’t doing her job? If needed, would you take legal steps if your agent were a family member?
On the other hand, with so many people in the business, you might have more than one REALTOR® in your circle, how do you choose between them? Would it affect your relationship or friendship if you choose one over the other?
Perhaps some of the most important questions to consider when working with a REALTOR® is about their familiarity with their area: do they know it well? Do they have inside information about the neighbourhood or building where you are considering buying a condo?
When an agent is not familiar with the local issues of a community, mistakes are made and the client is the one that ends up paying for those mistakes.
Other alternatives
When the time comes to buy or sell your home, how do you choose a real estate agent? Do you choose your friend or do you go outside your personal network?
The cons of going with someone that is part of your circle
The old saying “don’t mix business with pleasure” might be something to consider in this situation as there are many horror stories of people that decided to go with a friend or family member when buying or selling their property. It is understandable that you might want to help someone in your circle. However you need to consider the possibility of things going wrong. Would you fire your friend if she or he weren’t doing her job? If needed, would you take legal steps if your agent were a family member?
On the other hand, with so many people in the business, you might have more than one REALTOR® in your circle, how do you choose between them? Would it affect your relationship or friendship if you choose one over the other?
Perhaps some of the most important questions to consider when working with a REALTOR® is about their familiarity with their area: do they know it well? Do they have inside information about the neighbourhood or building where you are considering buying a condo?
When an agent is not familiar with the local issues of a community, mistakes are made and the client is the one that ends up paying for those mistakes.
Other alternatives
When the REALTOR® you are thinking of working with is someone close to your heart (for example your son or daughter) and choosing someone else is not an option, there are other alternatives.
Doing a co-listing: The second agent could show up as the secondary listing agent or they can equally participate to a degree, and still make some money from the transaction. However, they are not the lead agent. This works really well for junior REALTORS®. Another scenario of co-listing is when both agents work in tandem and share responsibilities.
This also works well when the sellers don’t agree on an agent. I did a co-listing years ago for a couple that was getting a divorce. The setup was that two of us worked together, but one of us was the liaison with the wife and the other the liaison with the husband because they couldn’t agree on using one agent. This set up worked really well as both parties felt involved and heard and theirs needs cared for.
Referral fees: Say you are contemplating the idea of moving to the North Shore from Downtown Vancouver and you already have a REALTOR® who you are working with and who is more familiar with Downtown Vancouver. However, you would like to work with someone that has deep knowledge of the area. It is very common for agents to give each other referral fees. In my case, I would offer a 25% referral fee from my commission to other agent. This way the client gets proper representation and the other agent gets a piece of the business.
As to what to say to a friend who is a REALTOR® and expects to be your agent, in most cases the best policy is honesty. Perhaps your friend isn’t familiar with the area where you are planning to buy your home or you simply don’t feel comfortable. You can also explain to your friend you don’t wish to jeopardize the friendship by bringing business into the table.
At the end of the day the most important thing is that you feel well represented and protected. Put together a checklist with the attributes your REALTOR® must have and keep in mind you are not obligated to work with someone just because they are part of your circle.
If you have any more questions, don’t hesitate to contact me. I will be happy to discuss your options when choosing a REALTOR®.
