Home Buyer/Seller as Guinea Pig

As a Realtor, I know better than to challenge an acquaintance who, almost sheepishly, explains that they would’ve liked to hire me, but instead were obliged to use their [insert relationship here**].

Far be it from me to poison — perhaps for years — an extended family’s Thanksgiving or Christmas, or strain decades-old relationships.

So, I’ll express empathy for the social tug they feel, and applaud their loyalty to family, long-time friends, or some such.

But, privately at least, I invariably think to myself, “Isn’t loyalty a two-way street??”

What kind of Realtor would put their financial self-interest ahead of their BFF or close relation — especially if the agentĀ is brand new to the business, (well) past their prime, or (heaven forbid) simply less than a top performer?

High Stakes

Put it this way: you seldom hear someone who needs back surgery say, “everyone says Dr. Smith is the most experienced surgeon for my procedure. But, my sister’s best friend is a newly-certified surgeon . . . we really have to use her instead.”

Thankfully, residential real estate transactions aren’t life-and-death affairs (usually).

However, given the price tag of even modest homes these days, even a single mistake can easily cost a home buyer or seller thousands — or tens of thousands — of dollars.

Or worse, cause a Buyer to lose out on their dream home.

Crucially, that risk exists even when the agent is experienced — just not with the type of property (for example, multi-family) or location in question.

Splitting the Baby

Fortunately, there are at least two alternatives for people who feel duty-bound to use a Realtor who may not otherwise be the best-qualified to represent them:

One. Co-list.

Nothing prevents a newbie agent from co-listing a property with a veteran agent at the same broker (note: co-listing between different brokers is more problematic).

The newer agent gets much-needed coaching and on-the-job training.

Meanwhile, the seasoned agent gets . . . a slice of the commission.

Two. Paid mentor.

At least when I was starting out (way back when), Edina Realty offered a paid mentor program for newer agents.

While the mentor didn’t formally get billing on MLS as a co-listing or Buyer’s agent, behind the scenes, they played much the same role, and were compensated for same (the range was 25% to 33% of the relevant commission, either listing or payout).

In fact, I opted for just this type of relationship for my first few deals (Thanks, Pam Gerberding!!).


So, why don’t you see these types of arrangements more often?

My three guesses: 1) the friend/relative doesn’t appreciate the skill involved buying/selling real estate; 2) the favored agent’s hubris, i.e., they don’t yet appreciate the skill required to buy/sell real estate; 3) and — yup — the Realtor-acquaintance’s financial self-interest.

**Common relationships include: sister-in-law; high school buddy; spouse’s first cousin’s brother, etc.

See also, “Realtor Job Description 2019“; and “How to Choose a Real Estate Broker in 2019.”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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