We’ve all heard the warnings: Don’t mix business with family or friends. But this old rule doesn’t hold a lot of weight with real estate agents.

In a 2003 California Association of Realtors survey, 18.3 percent of Realtors reported that their latest real estate transaction was with a friend, relative or neighbor. That compares with 15.4 percent of Realtors surveyed in 1999.

We’ve all heard the warnings: Don’t mix business with family or friends. But this old rule doesn’t hold a lot of weight with real estate agents.

In a 2003 California Association of Realtors survey, 18.3 percent of Realtors reported that their latest real estate transaction was with a friend, relative or neighbor. That compares with 15.4 percent of Realtors surveyed in 1999. And a Texas A&M University Real Estate Center study released this year found that 10 percent of home buyers who participated in the study selected a real estate agent who was a friend or relative.

Donna B. Thomas, a Realtor for Keller Williams in Plano, Texas, who has been an agent for about four years, said working with friends and family can be stressful and rewarding. “There was a little trepidation,” she said, when she first considered working with friend and relatives. “I had been in business a year before I started marketing to my sphere of influence. The stress is so high working with them. It was difficult at first because you go in with preconceived ideas about what they want.”

Now, Thomas regularly works with clients who are friends and relatives. “I just realized you give them the same service you give everyone else. You just tell yourself that you don’t know what they’re after at all. Clear your mind – watch and listen,” she said.

Working with friends and family can actually help you to know them better, Thomas also said. “You hear things you never would have known before. It gives you a whole different perspective of that person that you’ve never seen before. You are talking to them a tremendous amount of time and you see them work under stress,” she said.

Thomas said that she definitely defines boundaries when she is working with friends and family as real estate clients. “I’m very upfront about that. ‘Today, I’m your Realtor. I’d love to just chat and visit, but right now my main objective is looking for a home. This is work today – tomorrow we can go play,'” she said.

A potential downside of working with friends is that the business relationship can overshadow the personal friendship, and your role as a real estate agent “becomes the only way they see you sometimes,” she said.

Even so, she won’t stop doing business with people she knows and loves. “You have a wonderful opportunity to help them and hopefully make a smooth transition for them,” she said.

Eric Pakulla, a Realtor with RE/MAX Advantage in Columbia, Md., said there is always the risk that a business transaction “could hurt a friendship,” and a few of his coworkers prefer not to work with friends and family. “I’ve had great experiences and I prefer it,” he said. “Most folks want to help their friends and family out. Very few (agents) would not work with friends and family.”

While Pakulla, who has been in the business for a decade, has worked with many friends he first met in high school and college, he hasn’t worked with too many family members. That’s because most of his family members are agents, too, he said: his mother and father, stepmother, two sisters and a brother are all working in real estate in the same general market area.

Pakulla said friends are easy to work with because he knows they will be loyal consumers. “I understand their needs better than a client off of the street. It’s easier to understand what they’re looking for and their style and pace. I feel closer with my friends after that.” And, of course, he gets invited to their housewarming parties, he said.

With so many new agents in the real estate market, there’s always the chance that the new agents “could possibly take a couple of your friends (as clients) who are also their friends,” he said, and some new agents may be more likely to work with friends and family out of the gates, and then expand their customer base from this core. “That’s the easiest way to get started,” he said.

And that’s the way Donna Baker got started in real estate. “My first two transactions when I got into the business three years ago were with friends. I credit them for getting me started on a successful career. I have also helped both of my sisters find or sell homes,” said Baker, a Realtor with Century 21 Adams & Barnes in Monrovia, Calif. “I do think many (new agents) get started like I did, by making their first few sales to people they know.”

But while working with those you know is a good steppingstone, it shouldn’t be the only foundation, Baker said. “I don’t believe anyone who services only family and friends can succeed at being a full-time agent.”

While Baker said her experiences in working with family and friends have been mostly positive, there have been a few snags. She worked with a couple of close friends for about two years before they decided on a home, she said.

“My friendship with my closest pal almost fell apart when I got frustrated trying to find them a home. We had to take a break for awhile in order to get back to a good starting point. Everything worked out fine. They have their dream house and I got to be a part of their success, but it certainly was a challenge,” she said.

“All in all I think working with family and friends is fruitful and very rewarding. You need to be very careful to keep business on a professional level and not let the relationship get in the way of the transaction.”

Christine Hanisco, a Realtor with ERA The Masiello Group in Hampton, N.H., said her first transaction was with a cousin. “It went very well. I didn’t have to pretend I knew what I was doing,” she joked, “and (my cousin) was fine with that and trusted me.” Since then, Hanisco said she has also worked with parents she knew from her son’s daycare center. “I have been lucky and they all were just fine. I have a lot of fun working with people I know because I can just be my somewhat goofy self,” she said.

Many of Marie Williams’ family members work with her on real estate transactions – with the notable exception of a nephew who was leery of mixing business and family. Williams, a Realtor at Century 21 Gold Star Properties in Madison, N.J., said, “He listed and purchased a home with another Realtor. His reasoning: if there was a problem he didn’t want any hard feelings. Well, now it’s a given.”

It’s generally a good idea for consumers to work with a Realtor that is a friend or relative, she said. “If you had a doctor in the family, surely you would use him or her. I think a relative would look out for your interest more than a stranger.”

Williams said, though, that she has been on the other side of a transaction in which business and family – and booze – did not mix. “I had a transaction years ago where the seller listed with his brother. The (listing) agent showed up drunk for the inspection and got fired before the closing.”

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Send tips or a Letter to the Editor to glenn@inman.com or call (510) 658-9252, ext. 137.

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