5 Reasons Not To Hire a Family Member as Your Real Estate Agent

hiring a family member as your real estate agent

So I just arrived back at the office from a showing where I heard, I have a “family member who is a real estate agent” they will be handling the transactions.

This article discusses five reasons why may not want to hire a family member as your real estate agent.

This woman spent a half an hour on the phone with me saying her and her husband are wanting to downsize their home and they don’t know where to start.

I layed out the steps for her that made sense for their individual circumstances.

She was so thankful that I was able to set her down a path to success.  There was one condominium she really wanted to see so I scheduled it…. short notice to boot.

We get there and she informs me that she has a family member that is a part-time real estate agent…. her nephew.  And he would be handling everything.

She started asking me all these questions about buying and selling and she had specific questions about the unit she was looking at.  This was going to be a complex set of transactions and would require a seasoned real estate agent.

I said listen you dragged me out here I might as well show you the unit but let your nephew need to earn his keep, you should have called him to show you the unit and he will be able to answer all your questions.

What was her response?

“Well he doesn’t really seem to know what he is doing, he doesn’t do a lot of real estate and he has a really busy job so he couldn’t show me the condo in the next few days.”

Ok, family member as an agent or not there is several red flags in that statement.  A good real estate agent should be able to fully educate you about the transaction ahead as well as be able to find time to show you a property in a reasonable amount of time.

If you are going to hire and inexperienced family member as a real estate agent, let me ask you this one question….

If this family member came to you and asked your for $10,000 or $20,000 would you give it to them?

Most of you will probably say no.

Well, that is basically what you are doing when you hire a family member to sell your house.

They are going to potentially cost you thousands or even tens of thousands of dollars in the sale and purchase of a new home through there inexperience and lack of knowledge.

5 Reasons Not to Hire a Family Member as Your Real Estate Agent

5 reasons not to hire a family member as your real estate agent

Does that family member have the necessary experience to be your real estate agent? 

Experience matters…. big time.  I took me many real estate transactions and 3-5 years of working full time before I felt fully confident in counseling home sellers and home buyers.

Having a real estate license does not automatically qualify you to be the right real estate agent for a particular transaction

Your relative may have a biased perspective

Is your family member actually familiar with the area you want to do business? 

Bringing in a family member who is a real estate agent from out of the area is just a bad idea.  They are not familiar with the local markets or even some of the specific neighborhoods.  Real estate is very regional.

Not only are they not familiar with the local real estate market, but they could also limit the time they can give you if they are hours away.  In this hot real estate market getting into homes immediately si vital.

Is your family member a full-time real estate agent? 

This one is two fold.  One I already mentioned… experience. Helping a buyer or listing a home requires experience that is gained thru closing on 100’s of transactions.

Two, do they have the time to properly service your selling or buying a home?  The real estate market right now is fast.

If you are not in a good home in a day or two of it being listed, you will lose it.  Can that family member drop what they are doing to get you into a home?

Do you really want a family member knowing your business? 

There is a lot to a real estate transaction and many times real estate agents are involved in some of your close, personal information.

There could be divorce, financial distress or other financial information involved that you may not want family members to know.

Are you willing to ruin relationships by using family as a real estate agent?

I had a really good friend always tell me… everybody gets funny about money.

As I get older I realize how true that is.

I have watched friends and family members get crazy about money, whether it is an inheritance or business matters or borrowed money.

There is a lot at stake for you and your family member real estate agent could have thousands or tens of thousands of commissions at stake.

What if it goes wrong?  Not only could you damage a relationship with that family member it could damage relationships with extended family members as well.

Final Thoughts on Hiring A Family Member as your Real Estate Agent

After reading this and you still want to hire a family member as your real estate agent, at least have them compete for your business.

Interview at least two other agents and compare services, experience and track record.  In no way am I inferring your family member is not a good agent and as a matter of fact they could be a great agent.

You should do your homework and hire the best agent for your real estate needs whether they are a relative or not.

Your family member at the end of the day may be the best real estate agent for you.  But hire your relative as your real estate agent because they are the best fit for you, not just because they have a real estate license.

Bottom line is you have too much at stake.  An inexperienced agent can cost you 10’s of thousands of dollars on the sale of your home and/or a purchase of a new home.

Remember, emotions run high during a real estate transaction.  A misunderstanding or expectations not met could but a damper on one or more family relationships.

Boy, won’t Christmas at Aunt Mary’s be fun this year!!

As one final thought, the same goes for using a friend as your real estate agent for most of the same reasons.

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  1. My cousin would like to buy a single-family home, but since she’s new to property investment, she’s thinking of hiring a reputable real estate agent instead. I agree with you that it would be best to hire someone who has at least 3 to 5 years of experience in this industry. It is also true that hiring a family member for this job is not a good idea, especially because money is involved.

  2. As a Realtor, I am not privvy to my client’s personal or financial information unless they volunteer it. It is not required for me to do an excellent job for them. Therefore, THAT should not be a reason you don’t use a family real estate agent when buying or selling a home.

    • Margaret- Have you never been selling a home because of a bitter divorce or financial distress, no short sale or preforeclosure sale? I know I have. I always prepare net sheets for my clients and ask to see their last mortgage statement so I can accurately prepare one so they know how much they are walking with. Or have you ever helped a buyer and seller buy and sell at the same time and work with them to find financial solutions?

      Also check out the real estate groups on facebook. Almost on the daily is an agent looking for advice on a deal with a family member that has soured. It happens more than one might think. I am not saying don’t do a deal with a family member just go into it with your yes wide open.

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