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Marty and Max: The ugly truth — show me the money

by MARTY WALKER
| March 24, 2023 1:00 AM

Hey Max, I need a Realtor and I have a really good friend who is a Realtor. Should I use them?

Amazing songs have been written about friends: Queen: “(Ooh) Oh, you're my best friend” and Randy Newman: “You got troubles, I've got 'em too, There isn't anything I wouldn't do for you, We stick together and see it through, 'cause you've got a friend in me!”

It sounds amazing. Two peas in a pod, right? Doc and Marty, Shrek and Donkey, Joey and Chandler… Not so fast George Banks. Let’s consider the following. This is perhaps the largest financial transaction of your life. You need sound, brutal honesty and you must be able to rely on your professional to do what’s right. You can’t afford “going along to get along.”

All you have to do is Google “Using a friend or family as your real estate agent” and you will find an abundance of information. Following is just one example:

It’s quite possible that you have a close friend who is a full-time real estate agent with lots of experience and a great reputation. If that’s the case, by all means, hire them. But in the majority of cases, that friend, neighbor or acquaintance just dabbles in real estate and doesn’t represent your best chance to maximize value when buying or selling. When turning down a friend, you never want to be rude or hurtful. You do, however, want to tell the truth. Mention that you don’t like the idea of mixing business with friendship, or that you would prefer a little more privacy with your finances. It’s also OK to admit that you need a more experienced agent, while offering your friend the chance to co-list your property with a Realtor of your choosing.

In the business world when a leader has an amazing idea that requires large amounts of capital it is met with much scrutiny and thoroughly vetted. Sometimes it is successful. Most times their very next project is a major flop. As Andy Rooney would say, “Why is That?” There are numerous stories in Silicon Valley and too many to share in this brief space, but the reason is simple. Since “Billy Bob” is the proverbial goose that laid the golden egg, Billy Bob’s next project is not properly vetted and they are given a free pass resulting in doom.

Relationships change and for every “She’s My Best Friend” there is a “Yesterday, All my troubles seemed so far away, now it looks as though they’re here to stay, Oh I believe in Yesterday.” — The Beatles

According to U.S. News, “In some cases, people find that it’s easier to hire a friend rather than invest time interviewing several agents. In fact, a survey of nearly 300 sellers from the Redfin Research Center found that over a third evaluated only one agent before choosing one to list their home.”

How long does it take you to earn $50K? If you are willing to risk $50K or more on this transaction, then don’t invest the extra hour or two to properly vet your choice. Did you know you can ask your friend to co-list or make a referral and your friend will still get paid?

Too often a friend is chosen to sell the largest asset and the selling agent fails to provide the necessary marketing, images, videos, etc. It’s kind of like going to a friend that is a dentist and they leave out the nitrous and novocaine to save a few bucks. The result is excruciating but it happens all the time with real estate and we don’t always need to blame the real estate agent. Many times these situations are doomed before they begin. The seller is looking for the friends and family discount and the agent may not feel that committed. It’s a lose/lose transaction where both the agent and seller regrettably agree to accept less. It is never planned this way, it just ends up this way. Last year, I had a cash offer to present to an agent who received the listing through a friendship. It was a multi-million dollar property. The agent discounted his fee as a favor in kind. The agent/friend refused to return phone calls and over a week later called and said, “my bad…I had an offer…the home inspection blew up…sorry dude.” The property still has not sold, is off the market and the market has dramatically changed. This seller lost millions…

Last week, I had discussions with colleagues that were doing business with friends. One of these were lifetime friends. Their children grew up together and it was like a nasty divorce. That friendship just got train wrecked and they are no longer speaking to each other. “But used-to-be's don't count anymore, They just lay on the floor 'til we sweep them away." Yes, for every love song there is a heartbreak ballad to match it (Where is Johnny Cash when you need him?). Same is true when using friends in business. I have many business relationships that are friends, however, most of them were business relationships first and the friendship was forged out of mutual respect.

When selling, if you would like to consider using a friend, have them interview for the job or ask them to co-list or make a referral. Things to ask include: “What are you going to do to market the property?” “What is your source for data to determine listing price?” “How long will my home be on the market?” “Will I have to reduce my price?” “Who are you going to use for media, photography and video?” Many times your friend is the best real estate agent in town and you should hire them. If you do, don’t ask for a discounted fee. Interview three agents and if you use your friend, use them because they are the best and not because they are your friend. Being your friend gets them an interview. Not the job. Worst case, absolute worst case, interview your friend plus one other. Why do so many use friends? According to US News, it is because it is simply easier to hire your friend. Don’t feel bad, just know it’s a blind side. This is the same relationship advice I give my daughters. “Do not be lazy, and if you put the effort into the front side of the relationship, you don’t have to work so hard on the relationship for the rest of your life."

There have been many sales lost due to the buyer or seller not being comfortable sharing everything about their finances, divorce, credit or the fact that they are racing the clock and about to lose their home in a foreclosure. If you have a home to sell and want to purchase another, you may be better off using two agents. Not always, but many times. Using a friend is much easier if you are the BUYER rather than the SELLER. Selling your home is normally WORK. Buying a home is normally FUN. Use your friend for fun and you may want to sell or co-list with a hired gun and your friend still gets paid. There is a scene in the Tom Cruise movie, “Jerry Maguire” where the client (Cuba Gooding Jr.) is looking for an agent and says to Jerry, “I have a family to support. I want my new contract and I like you, Jerry, My wife likes you. I will stay with you. That’s what I am going to do for you, but this is what you are going to do for me. Are you listening? This is very personal and very important. Are you ready? Here it is. SHOW ME THE MONEY!” This is a business transaction and needs to be treated accordingly and you need your agent to do the same for you. Fun Fact: According to Vogue, “There’s a (dirty) secret nobody tells you about getting engaged: you’ll probably lose a friend (or two) before the cake is cut.” Back to you Andy (Rooney), “Why Is That?”

Tip for Listing Your Home: Make sure your agent orders drone photography and video with your photography package. Showcase the surrounding area, the layout of a lot and views.

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Marty Walker is a licensed real estate professional and paid consultant. Information shared in this column is of a general nature. For specific questions in relation to your unique property, email to set a time for a consultation. Information: MartyandMax.com or Martywalker@remax.net