Every client is important no matter how big or small is a business. But selling real estate is somewhat different than selling doughnuts or hot dogs. Houses are most likely the most expensive asset that a person will ever buy or sell, so it’s crucial that the process goes smoothe and by the book for everyone. Given the fact that the average Realtor® generates around 12 transactions a year, according to the National Association of Realtors®, who wouldn’t want one extra transaction from a family member?
Well, everything looks good in the beginning, but things could get out of control, communication might not be the best and either the buyer or the seller could feel treated unjustly. Agents can represent a family member but they must disclose it upfront before an offer is placed. For Realtors®, this aspect is clearly specified in the Codes of Ethics. However, there are two things that any real estate agent should consider before accepting to represent a relative.
First of all, is the lack of trust. Your client, although a family member, might not trust you completely or might think that you’ve done too little to get them the highest price for their property. If you don’t have too much experience in the real estate business, your family member could replace you at some point for not having brought the results anticipated. This move might hurt your feelings and could even destroy your relationship.
Secondly, your biased opinion could cause problems. For example, buyers might feel that they’re not getting the best price or might think that you’ve inflated the price so that your relatives get more money. You may feel good about representing a family member, but he/she might feel that you’re too intrusive, as they’ll have to disclose the reason for selling the house (it could be due to foreclosure, due to divorce or other reasons), the defects of the house, their annual income, their credit score, the type of mortgage they want to apply for in order to buy a new home. Not everybody feels comfortable sharing these details with someone they know.
All in all, real estate agents can represent a family member, but they should be aware of the risks and weigh in the pros and cons. Sometimes it is better to let another colleague handle their transaction.