Commercial real estate can be an intimidating environment, particularly for new investors. Fast moving, competitive, and fraught with risk, the market may seem inaccessible without an experienced ally. Commercial deals can be very complex and opportunities can surface and disappear in a wink. That’s why choosing an agent is a critical early step. That contact opens the door and helps investors to navigate.
When we choose partners, it can often seem natural to rely on people we know. It is easy to work with someone when there’s an established relationship of trust and goodwill. Few of us don’t have at least one friend or relative in real estate, and our first impulse when we need professional advice is to turn to them. After all, your friend or relative is not likely to steer you wrong or deceive you. That takes care of the honesty requirement.
Honesty is unquestionably an essential component of quality commercial real estate representation, but it’s not the only one. Before you hire your friend or favorite cousin, consider some of the pitfalls of the arrangement.
Real estate deals can be stressful, and that can bring out the worst in people. Consider the possible consequences for your relationship if it’s likely that the process will be tension-filled for you. You’ll be making some very big decisions with serious financial consequences. There’s a chance that things won’t work out as you planned; be prepared for that possibility. Sometimes a working with a more objective person helps you keep emotion out of the mix.
Depending on your relationship, a friend or relative may take your business less seriously. They may feel that it’s not necessary to devote as much time to you as to other clients. They may assume that they know what you need and not complete the usual due diligence in some cases. Watch out for this casual sort of arrangement, as it can cost you considerable time and lost opportunity. If this is the sort of thing you will expect when hiring this friend or relative, you may be better off with an agent who has rave reviews from clients and a track record for excellent service.
Favoring an agent merely because they’re your friend can put you at a disadvantage if your friend does not specialize in the area or property type you are interested in. To successfully navigate the market, you need an agent who has professional contacts there and knows the area’s trends, history and inventory thoroughly.
So before you choose a friend or relative to represent you, consider these ideas. If that person not only has your best interest at heart, but also is experienced and knowledgeable in your area of interest, committed to customer service, and able to dispassionately advise you, then you have your agent. Just make sure that you’re comfortable with the arrangement, and should that change, don’t hesitate to look elsewhere. A professional will understand that this is sometimes necessary, and a friend will too.