Hi there,
Is it wise to market to friends?
I am a new agent and viewed a training video that suggested to start marketing yourself to the sphere of influence: starting with family and friends, and other associations you belong to. In my case, I don't have family closeby so I marketed to friends. Coincidentally 3 of these friends had a house to sell and 1 is a buyer, and all 4 of them turned me down within a 3 month period :-( I had a full-time daytime job that I just left recently. So that may be one reason for why I was not considered because I was still employed (although one of the sellers knew that I was quitting my daytime job). And 2 of the sellers mentioned that they already knew another agent and had worked/consulted them before, and they went ahead and used them.

However, because these people were friends I felt a little hurt. I'm starting to think if I should altogether get out of real estate since my thinking is if friends don't want to work with me, who will? I do not have prior sales experience and my previous job was more technical.

Did it work out for other people when they marketed to friends/acquaintances?

Thanks!
Rosalyn

Rosalyn, I think working with friends is very tricky as there is a certain amount of professional distance that most people want in dealing with their real estate agent. They may not feel comfortable pushing back on a friend or "firing" a friend, which they can do with another agent as it is broker firm that owns the listing. If everything ran smoothly in a real estate transaction, then certainly it would be no problem to work with friends, but it's much easier to maintain that professional distance with acquaintances.

If it makes you feel any better, I haven't had one friend list with me. All my listings have been with acquaintances or strangers and I'm in the top 10% of agents in my firm of 2,000 agents in my second year of business.

The first day of training in my current company they said flat out, within your first year, someone you know well - a friend, a relative whatever - will buy or sell from someone else.

One reason is, they just don't want you to know that much about them - it's a privacy thing. You can address this, but it's hard to work around.

The other is, maybe they don't see you as the Real Estate Pro that you should be selling yourself as. Maybe they see you as the friend/family member who got drunk with them last month or who crashed mom's car in high school - know what I mean?

You need to work on selling these people on your new career - that you really are the best person to work with not only because of your knowledge, but because they already trust you and know you'll do a good job.

[QUOTE]Originally posted by Eric Rogers:
[QB] The first day of training in my current company they said flat out, within your first year, someone you know well - a friend, a relative whatever - will buy or sell from someone else.>>>>

This is a standard training line at all the usual insurance, realty, and personal service businesses out there. A lot of new agents strike a deal or two with family and close friends, then fail to market themselves further. Business doesn’t beat on their door and suddenly, a year or so later, they’re selling something else. I know as new agents, friends and family seem like the easy money, however, with enough time, you'll learn to never work for them. Never. I simply refer them out and ask the agent to discount what would have been my referral fee out of their total commission and pay me nothing. It's the best money you'll ever give away to NOT have a real estate transaction ruin a good friendship. Again, this is direct family and close friends only. You will also learn that these same people have some rather odd expectations of you as a "family" realtor:

For example, you will gladly show them 600,000 houses on every Sunday for 3-4 years while they "think" about what they want to buy.

Once they find a place they want to buy, you are to offer the buyer half of the asking price, and, as the realtor, get the "inside discount" and make it happen. If not, they will always.. ALWAYS believe they overpaid and it was YOUR fault. Remember, ALWAYS. It may not come up until a family party 20 years from now, but this thought is lingering there like cancer, waiting to pop up on you.

Then, at the closing table, after this impossible deal has come together, they will fully expect you to not only credit your entire commission towards their costs, they will expect you thank them for the privilege of having worked for them, or else you “ripped them off” for your services..

Oh, and don't forget to bring them a nice thank you gift at closing.

For casual acquaintances, all bets are off and I'm one of the millions of agents they may interview anyways. Been there done that, never again.

I have been in the business a year and although I had a great first year, it is only now that I realize how much I did not know.

At the risk of being seriously flamed, if I were not in the business myself, I would never hire a new agent to represent me and particularly not a friend.

What many (not all) new agents (and I still consider myself one) don't realize is just how much they do not know. And just because they didn't run into any serious problems or make any major mistakes in their first few deals doesn't mean it was anything more than luck that they weren't in a situation where they needed more knowledge than they had.

I am absolutely amazed at how many new agents have one thing on their mind when starting out - their commission split - and are out there, working with an unsuspecting public, handling what is, for many people, the biggest investment of their lives. It boggles the mind.

Now, with all that said, I think the last people you want to work with when you are new are your friends and family. And they are probably reluctant to work with someone who is new, too, regardless of your relationship. You haven't proven yourself in this business yet and that should be their first consideration. We should never do business with friends simply by virtue of that friendship. It has the potential to destroy the friendship if something goes wrong.

I have never prospected to friends and family; after all, they are the ones who know full well how well I am doing. Now that I have a number of transactions behind me, my friends and family know how much experience I have and if they want to do business with me, they will certainly ask.And even then, I would refer them to someone else.

While I would never ask them for their business, I would, however, not hesitate to prospect to them for referral business. Once you have proven your worth, they should be happy to do this for you. If they do not, then you have your answer - they may not have as much faith in your as you have in yourself. Time will prove them right or wrong. ;-)

Don't take it personally; this is business. When you're new, your chances of a screw up are much greater -- and is this with whom you want to risk a bad experience? I don't think so.

jmlrealty,

I whole-heartedly agree with that quote.

I give my friends and family the same "insider discount" that I offered to my existing clients....and Joe down the street.....and Sally across town.....and that couple I spoke with at Sams Club last weekend.

SusanScuba, your point about new agents not knowing enough is taken, but isn't it a generalization? I know agents that have been in the business for years that couldn't build a virtual tour with a gun to their heads and barely know how to switch a computer on let alone use it effectively. With 85% of buyers going to the internet to find a new home, who's the dangerous agent who doesn't know enough in this case? Is not knowing enough a function of simply being new or is it due to not being willing to take the time to learn?

Notice I said "many" and while I realize many of them are extremely well qualified and competent, I was thinking more about the potential pitfalls of the actual transaction. I view virtual tours, websites, etc. as functions of prospecting and building a client base. While not knowing how to turn on a computer might keep them from picking up clients, it doesn't directly affect the job they do for the client they eventually get -- ask any seasoned agent who has built a thriving business on referrals and who is just learning how to use email. There are plenty of those around who have very successful businesses. ;-)

Not being tech savvy might hurt today's new agents, but it doesn't make them dangerous to anyone but themselves.

I am referring more to the things an agent overlooks when it comes to the transaction itself, whether it has to do with financing, writing a contract that adequately protects the client, negotiating, etc. In this case, experience is the absolute best teacher, although any new agent can muddle through if they have enough support from their broker.

Oh I agree, lots of them out there. But are they really acting in the client's best interests by not marketing their homes to the tech-savvy generation of buyers?

Is inexperience in this arena "better" than inexperience in the transaction process? I mean, you can't sell without a buyer can you?

Technology is only going to bring buyers to a certain point. And at that point, it's the involvement of the agent that brings the sale together, via more traditional means. After all, tech-saavy buyers may be identifying properties in a different way or starting their search in a different way, but at the end of the day, they are still buying in a traditional way, which heavily involves the real estate agent, whose competence in the transaction can make or break the deal.

Besides, even the most tech-deprived agents' listings end up on a myriad of websites, by virtue of their local MLS or individual broker, so it's not entirely accurate to say their clients' homes are not being marketed virtually. Depending on their brokerage, they may very have a lot of online marketing and exposure, regardless of the level of their own expertise.

I generate a lot of business from the marketing of my website and I do the majority of my business via email, fax, etc. I have sold houses to people who didn't even see their house until they arrived in town to move in, so I am obviously on board with the whole tech thing.

My clients didn't buy houses sight unseen, though, because of what they saw online, they bought them because of what I brought to the table that made them comfortable in making their decision. Otherwise, they'd simply go to "buyhouses.com", put in a credit card number and buy a house, if it was that easy.:-)

However, at the end of the day, when it came down to the transaction itself, my clients relied on ME to help them identify houses (often their impressions based on what they saw online were not accurate and, not knowing locations and neighborhoods, they had to rely on me for that info) and neighborhoods that would work best for them. Virtual tours, in particular, are almost always misleading - the house really never looks like it does on the tour - it may look worse, it may look smaller, it may look better, but God help anyone who makes a selection based on a virtual tour, because rarely does it really, really look like the house does - no matter how great a virtual tour it may be. Same with internet descriptions; some agents have no talent for writing descriptive prose and houses are passed up because the description didn't wow; some agents build up a house so much when you see it in person, you cannot help but be overwhelmingly disppointed. Viewing anything online has its practical limitations. It usually takes the interaction of the agent to guide the buyer to the right property.

So, while technology plays a big role in my business, it would fall flat without the involvement of the agent, leading back to my original premise...

Oh yes, I would definately agree with you there. Marketing is responsible for bringing in the interested parties - sales is responsible for, well, "selling" the product.

But is "sales" a knowledge, or skill (or both)? And how is that affected by years in the business? Are we still generalizing here? I mean, if you don't work on sales skills, will they get better over a long period of time? Probably. But better than someone who spends some time working on them? Probably not.

New, experienced, old, young, whatever - for none of these agents can you categorically say, "don't use them, they're no good".

Why? Because when you hire an agent, you're hiring an individual. No matter what agency with whatever rules someone works for, the agent still has to perform. If they are not doing something and that causes a problem, whether it be in the marketing, sales, transactional, customer service or any other department, they are not being an effective agent.

There is no "better flaw" - there is only a flaw. It is your statement that newer agents should automatically be held in lower regards simply because of the perception that they know less that I have to take exception with. How many years do you have to study to follow the law? How many times do you have to fill out a sales contract to get it right? How much experience does it take to always act in your client's best interests and provide great service?

And my point is: new, experienced, old, young, whatever - has no bearing on how well you perform your duties to your clients. It is each of us that determines this individually - generalizing based on the above factors does us all a disservice.

Thanks guys for the overwhelming response! I feel a little better now knowing that working with friends is not a good idea. I think the advice of the training video that I watched should be rather to use your circle of friends for referrals but not to expect to do business with friends necessarily!

I agree also that it is important to learn the necessary skills (like sales skills, customer service) in order to do a good job and get referred to more people.

By the way, I was asked many times which realty I worked for when I met new people. For a new agent, does it help to be part of a reputable company that has a large market share?

Thanks all!

Rosalyn

It's happened to everyone. I think that when you are brand new you are less likely to get a deal with friends than a stranger. I think they just don't see you as a "real estate agent", and it takes them longer to get confidence in you than other who meet you as an agent. Keep marketing to your friends and family. It may take them longer to come along, but in a few years that same person that just broke your heart may be your biggest advocate and a great referral source.

I owned a bridal shop ( much more stressful than this any day) and after that in sales for 5 years. I also have degrees in Psychology and even worked in a Psych ward. And at one point I was in market research. So to say newbies are not good at it, I say, that unless you know their background, you can not make such generalizations. I know in the begining I did not know it all, but I took every training class I could, observed the top agents and teamed with another in the same position. Together now we are as good as the other agents in the office, the only things that holds us back, is the amount of time we are willing to put into it.

And from where I am I think some of the older agents have gotten lazy and fall into ruts, many of the newer agents have more drive and are willing to try anything to make their customers happy.

As for SOI, my first listing was someone I worked with, and it turned out great. And just this month I sold a house for my close friend, her mother's house and it was a perfect sale, no hitches!
But as someone said families do sometimes go elsewhere, my own Son bought a FSBO (GASP). But in all fairness it was a great house at the price so low, it would have taken me months to find one as great. And besides, I know darn well I would have given him my share of the commission anyhow!

Absolutely! In fact, as a more experienced agent it still helps. If I left and went to ReMax, I'd gain percentage of commission, but lose in total dollar volume. Staying with the #1 firm in market share is worth a lot in terms of perception, if not reality.