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Would you hire a friend?

After we ring in the New Year, Girl Ninja and I plan to get serious about hunting for a house. I’ve been doing some research and exactly what that process entails and it doesn’t seem too complicated. We’ll get pre-qualified, possibly pre-approved, and then start looking for a real estate agent. No big deal right?


Pre-qualification is a breeze. Just type in some stuff in Google and you’ll get an idea of how much money you should be able to borrow for a mortgage. Even pre-approval is a piece of cake. Walk down to your local bank, pay them like $50, give ’em some financial documents, they run your credit, and *BAM* you get pre-approved for a mortgage (assuming you have your shizz together financially speaking). Easy, peasy.

It’s the Real Estate Agent part of the equation that freaks me out.

Girl Ninja and I know about two or three people on a personal level (mostly through church) that are real estate agents. Now they aren’t our best friends in the world, but we’ve known them for 10ish years, and to the best of our knowledge they are pretty good at what they do. But the question remains….

Should we hire one of them?

Here are the different scenarios that could play out and my thoughts on each:

Redfin has a really attractive business model

For potential buyers (and sellers). If we use Redfin to purchase our home, we get a portion of the closing costs paid back to us (usually around 1% of the purchase price). That means if we bought a $350,000 pad we would get a check for $3,500+ just for using a Redfin agent.

It would definitely require more effort on our part, and it’s not as personal as working one-on-one with an agent, but $3,500 is nothing to scoff at. Not to mention, if we negotiated seller-paid closing costs into the deal that would take Redfin’s reimbursement even further. Hmmm… very appealing indeed.

Hiring a stranger.

We could also go the route most people probably do. Interview a handful of agents that are familiar with our top desired locations and pick the one who has the most impressive resume.

This would ensure we have someone working for us that has a proven track record of success and is intimately familiar with our desired location.

What’s more, since we don’t know the guy/girl on a personal level, there would be no awkward tension if we were unhappy with the services provided. A stranger has to work hard for us if he wants to stay our agent. That in and of itself is priceless.

Lastly, we could go the friend route: AKA ‘Work Relationship With a Friend’

Hire someone we know on a personal level. Maybe they’d cut us a break on their commission (since we may not have hired them otherwise), maybe not.

We know the character of these people and would totally trust them to guide us in the right direction. I don’t think they’d ever try to have us buy a house, they wouldn’t actually buy themselves.

Peace of mind is crucial when it comes to making the single most expensive purchase of our lives. A friend might be able to provide just that. But if anything goes wrong, you might just stop liking your friend.

All three scenarios have some serious pros and some serious cons.

I honestly don’t know what to do.

I’m cheap as hell so part of me wants to go Redfin. But as a first-time buyer, I like the idea of having a relationship with one agent throughout the whole process. It doesn’t matter how much money I save on commissions if the house I buy is a crappy house, right?

What say you people? Who would you recommend working with (Redfin, a stranger, or friends)? What are the pros and cons of each as you see them? Help a Ninja out!!!!



  1. A fourth option is to become a Realtor yourself 🙂 Instead of a 1% cut, you can take the whole 3% cut! I took a class to help me pass the real estate exam in Las Vegas, but never took the test. I know, pretty pathetic. However, I did learn quite a bit from the class and hopefully I will pass that test and work for my friend who is a broker, you know the difference between a real estate salesperson and a real estate broker, right? 😉 I wish I had known what I know now when it comes to real estate in general, I learned the hard way by getting ripped off by both Realtors and lenders…ugh…

    In regards to your three choices, I would probably chose your friend and demand the same terms as Redfin, 1% cash back. If they do not agree, I would definately use Redfin.

    In regards to your lender choice, you need to use a mortgage broker and/or LendingTree. Shop around for the best mortgage terms from interest rates and closing costs to customer service. Put the Good Faith Estimate sheet under a microscope and compare it to others. This step is even more critical than getting a good Realtor. I would also not use a lender that a Realtor suggests unless there is more incentives that go along with it.

    Don’t forget to get a good title insurance company too!

    I really need to become a Realtor…

  2. Buying a house is a legal transaction — you want to make sure that contract (agreement of sale) is solid. The home-buying process is different in every state (ie NY, I believe you’re required to have a lawyer review sales agreements. PA is fend-for-yourself).

    When I bought my first house, I used a realtor recommendation from a friend. The realtor did everything that Redfin touted on its site (Sunday night negotiations, counseling based on previous experience) and was able to put favorable terms into the contract to ensure that I was protected during the sale.

    I would investigate what the realtor would be responsible for as part of the transaction (ie protecting your interests in negotiating a contract — or just finding you a house and deciding a sale price?) in Oregon, and make a decision that considers your overall potential liability in the transaction and your compatibility with the realtor. (One potential house I visited had an open bucket of live mice inside; my realtor and I had a pretty quick bonding experience when I *almost* jumped on his back and had him run out of the house. So, you never know what you’re going to need your realtor to do. You want someone who “gets you”…and/or gets you out of a house with a bucket of live mice.)

    Personally, I would ask for realtor recommendations from friends, and not necessarily go with a friend. I wouldn’t expect or request that a friend reduce or waive his/her commission for assisting me (just as I don’t assume that people who request my professional services expect them for free). I’ve witnessed situations where realtor friends don’t do their best work with friends because “they’ll understand” (or perhaps because they’re giving a freebie). If you don’t have friends who have purchased homes in the area, it looks like Redfin could help you find a good realtor.

  3. Try out as many realtors as you can (friends and not) while looking for a house. Don’t sign a contract with a particular realtor until you absolutely must (ie you’re making an offer on a house). You’ll learn which ones you like and which you don’t this way. Our first realtor was a nice lady who didn’t listen to what we said (she showed us houses in areas we didn’t want to live in, at prices we weren’t willing to pay, missing features we required in a house); we replaced her with a friend’s mom who was amazing and found us the perfect house for less than we dreamed within weeks. When we bought our second home we tried a dozen before we found the right one.

  4. I wouldn’t start by doing any of the above. First thing I’d do is check an online customer review source like Angie’s List to see who is recommended. Then I’d go through a few years from the Real Estate section of the Seattle Times to research stories of home buyers and which agents seem to be best for your needs. (Every Sunday, The New York Times publishes a half-page story of a home buyer’s search for the perfect home, and it names agents’ names. Perhaps your paper does the same.)

    Once you have taken those steps, you may well find the initial question you posed has answered itself.

    (Editing features works great, BTW.)

  5. I am a difficult home buyer (at least I admit it) and you will see buying a house is not as easy as you think. Knowing this I would make sure to mention it to the agents and most of the time they say they can handle it (guess what some can’t) I have worked with both friends and strangers and I had better luck with a friend. She knows me and knows my quirks; she was patient and knew what to say. For that reason I would say a friend. They do have your best interest at heart, and you want to have a good experience and buy a good house.
    I sold and bought a house from her in the period of 3 months; she credited 1% of the commission on both transactions.

  6. As a newbie to this process….I wouldn’t go it alone. I would ask your real estate friend for a recommendation (you could even say that you wouldn’t want any money dealings to get in the way of your friendship) and interview from there. Don’t sign a contract until you are sure you want to be with this person for a long haul (we ended up hating our realtor when we bought our house).

  7. I have a friend who is a redfin agent and went through very little work to become an employee there. You want someone who has the most experience possible because this is a HUGE transaction. A bit of a kickback isn’t worth the amount of money you could loose due to bad negotiations or not finding information about the market (say that your house is located near something like a housing project or a nuclear power plant- things that a realator would make you aware of). Don’t go redfin.

  8. Wait, you have to pay money to get pre-approved? I’ve never paid a dime, this is weird to me. Anyway, moving on… I would not work with a friend or someone I knew again. I had a bad experience with using my friend’s mom, who had been a real estate agent for 30+ years. I feel like she worked less hard for me and cut corners because I was her daughter’s friend, which seems like the opposite of what would happen. Then it was awkward when I didn’t use her mom when I sold my house. Never again. Since then I’ve worked with agents that I know, but I know them as agents, nothing else.

    I also second the advice of either using an online lender (I had a great experience with Lending Tree) or a mortgage broker to get you the best rates.

    • Ah, I had read online it wasn’t uncommon to be charged like $50 for the pre-approval process by the bank since there is no guarantee you will actually end up using them for a mortgage once you have been pre-approved. If people will do it for free though you better believe I’m gonna shop around!

  9. Your situation is good for you guys because you’re only buying – don’t have to worry about selling as well.
    What we did when we bought our first house was went with a stranger, but someone who came highly recommended from two separate friends that we knew and trusted. our agent ended up being amazing, because she almost acted like a Mom helping these young kids out. She didn’t pressure us to buy a house just to get the commission – she would be up front and honest if we went into a house and the kitchen set up was not ideal, she would help us try to envision what our furniture could look like inside a house instead of their large, overstuffed couches, etc.

    I’m not sure I would go with a friend – what if things go sour, or they don’t give 100% in to your home search because they’re not working as hard for your business??

    i would definitely seek referrals from people in the community that you trust!

  10. An experienced agent will know the history of all the areas you are considering and can better tell you how each property will retain its overall value going forward (based on history).

    Also, some of the best properties are bought/sold before they ever get placed ‘on the market’ and you need the inside track on these houses.

  11. I wouldn’t go with a friend because when you bring money into a relationship, it changes. If these people are important to you, let them stay friends only. I would hire a professional who has a good track record and lots of recommendations.

    Buying a house is hard work. Do not rush into anything. I have been there twice so I know. I have seen at least two dozen apartments before I purchased my current apartment and the moment I walked in this one, I knew it was “the one”:) Second time around when I was shopping for a temporary residence to later become a rental property, I saw less than a dozen but again, when I walked in I had the same gut feeling. Even if you make a list of what is important to you beforehand, after seeing many options your gut assigns different weights and priorities to each. That’s what happened to me anyway. Good Luck with your hunt!

  12. Your Redfin link does not work. Also check your state laws, in some states you need two title policies – one to protect the bank and one to protect you.

  13. If you do go the friend route, do not ask for (or even accept if offered) a cut of the commission. Commission is a real estate agent’s income and they rely on that income to pay their bills. It is not fair for you to ask them to do the same amount of work for less pay just because they are a friend… and it is not like you have to pay extra money for their services anyway… the seller pays the agent commission, not the buyer.

    I don’t know how close you are with your real estate agent friends, but I can almost guarantee that they may feel slightly betrayed if you don’t use one of them. And that is not to say that you should… because like a lot of others have said, it is not always smart doing business with friends. However, since being a real estate agent is their job, you might want to consider whether or not your business will help them out. If any of them seem to be struggling financially at all, the commission from your sale could be a real blessing to them. If you go with a redfin agent or stranger, that same commission that could have helped out your friend is going to someone else. Just something to think about.

  14. I’m glad you haven’t had 15 comments posted telling you to go without an agent! I had a few friends who said that agents are useless but that has NOT been my experience. I started with a Redfin agent and she probably would have been fine, but I wound up working with a neighbor (NOT friend) who I liked a lot. The key thing (I think) is to find someone who can work with your availability, and who you can communicate well with.

    I also agree that it’s not a good idea to use a casual acquaintance, which is what your friends sound like. I would either use a super close friend who I knew would work his/her butt off for me, or I would go with a stranger. And I don’t think I’d ask a friend to give me a discount!

    So here’s how it’s played out for me: In the span of about 6 weeks I looked at 21 houses and made offers on 4 and am in the process of closing on the 4th one. I’m in Portland looking at the “affordable” end of the market and the competition is pretty stiff.

    I’d seen “my” house online and wasn’t going to pursue looking at it because it’s not cute. However my agent suggested we check it out while looking at some other ones, so I figured I’d take a look. I knew that she understands my criteria: I preferred a house in a certain area, with little to no initial upkeep/projects required, at a certain price point, without a huge yard, and this house totally meets those requirements. When I saw it I was underwhelmed and she played it cool, but then we went to look at 3 others houses and then revisited this house. I realized I didn’t have any objections to it, I just didn’t love it, and I said maybe I should make an offer. Only at that point did my agent express her opinion (that it was a super solid house at a great price), so we made a full-price offer. The house was on the market a total of 24 hours before they accepted my offer, and I close in early January. My agent’s been great in guiding me through all the hoops – good luck finding a good one!

  15. I would NOT go with the friend, no matter what you do. If you end up being a picky buyer, or GN ends up being a picky buyer, and let’s say you drag this out 6+ months, that could place significant strain on your friendship with them. After all, they want their commission, and you’re being slow. It could work out well, they could get paid, you get a discount, etc, but it also could be like that scenario above where things just don’t work out, and you’ve lost a friend. Is that worth even the possibility of saving $3000? That’d be coming straight from their paycheck, so I wouldn’t count on it. They might even be offended by you asking.

    My wife and I went on a recommendation from a friend — I had 3-4 people at work that all used the same agent, all had good things to say about her. We signed up for the MLS listing through her and actually were watching for ~2 years. When we were ready to buy, we only looked at 4 places, but because we had been watching and were aware of the market, that’s all it took. Used her recommended mortgage broker from the same building (turns out they were dating, didn’t know until after the fact, it didn’t affect their professionalism at all), and everything went incredibly smooth. I have ZERO complaints.

  16. Go with a stranger. First of, your “friend” may feel entitled to slack because they think you wont fire them. Interview a couple of realtors and go with them to some of the houses they want to show you. This will give you an idea of whether or not they “grasp” what you are looking for. Make sure you read and re-read and RE-READ your contract before signing it. As long as you take your time and don’t jump on the first house you see you will be fine. I would also advise you to hire your own appraiser when you find a house you really like. They can find problems and anticipate costs prior to you taking on more than you can afford.

  17. I’d go with a broker, If you use they have an option where you can see realtors in your area and see if someone has been recommended. There’s a difference between Real estate Brokers, and Real Estate Agents, an Agent can act on your behalf, so if you’re selling a house and say let’s list it for 350,000 but I can walk away with about 275,00 as your agent they could accept an offer for the lower price just to make a quicker sale instead of waiting it out for better offers. Broker’s have to show you every offer. Buying a house i’d say to go ahead and use a Broker because they don’t make any money until a house is sold. Generally the comission is payed by the seller of the house upon closing, and in my area it’s 6% split between the buyer’s broker and the seller’s broker. what I would say in buying a house definitely use a Broker because there is no downside the sellers are paying the comission and they can walk you through a lot of things involved in the area. Make sure up front you tell them how often you want to be communicated with and how. for instance “once a week please tell me what’s up with a deal with a quick text”. A fast homesale is generally 45 days and that’s working pretty quick. Selling your house you could probably get away doing it yourself I would just market that you’re willing to pay a 3% broker comission. Also don’t be afraid to go bananas with addendums, saying something like, i’ll offer purchase price under the condition that seller will pay buyer’s title insurance, Replace roof, Replace plumbing, treat for termites and replace windows with thermal pane windows. the worst they can say is no, if you don’t shoot you don’t score.

    • I just sold a young couple they’re first house, we went pretty well under purchase price and got the roof replaced and all of the polybutylene plumbing in the house replaced with Pex piping. There’s a lot that goes into a house, and when you purchase a house there’s multiple times to back out. Make sure to get a home inspection, as well as a termite inspection, and possibly a pumber to inspect but a good home inspector will catch a majority of the problems with a home.

  18. I’m friends with a few real estate agents and while a few of them I probably wouldn’t go with, I know I trust two well enough to have my needs/wants/restrictions at heart. If it’s a SUPER close friend, then no, but it seems yours aren’t best friends of yours anyway so it should be ok. Maybe it’s just the market of the area I live in, but people can be sharks so having somebody on the inside with an ear on things may be just the person you need. Somebody with a personal incentive to help you. As I said, it depends on the friend. I’d give them a shot or at least ask for their advice.

  19. As first time home buyers, we have some friends that are real estate agents that we are NOT using. We wouldn’t feel comfortable putting a friend who is an agent through the amount of hassle that we’ve put a complete stranger through. I’d feel bad if a purchase doesn’t pan out with a friend, if they’ve worked hard on the case, whereas it’s “just business” for a non-friend to us. Plus, they might see us in a different light, being that we are pretty demanding in the buying process.

  20. We currently own a home in MA, are selling our home in VA and purchasing a home in FL. We are working thru our lender, USAA. They have a program called the Movers Advantage program, they will give you back up to $1,000 at closing for using their realtors that they provide for you to. They are very professional, and would highly recommend the program. Also, just an FYI you have 3 days after a home inspection to get out of your contract ( if you decide it is a crappy house). At least it is 3 days in VA and FL. Check your contract to see if it is 3 days in your state. Also, apparently there doesn’t even have to be anything wrong on the inspection report. It is just your window of opportunity to get out of the contract with no repercussions

    • Yeah real estate law vary’s from state to state, but there’s generally three different times to get out of your contract. submit an offer under what asking price is with all of the terms you want, like replace the roof and carpet or something. then they’ll accept. then you can get a home inspection if you don’t like something about the home inspection you can ask them to fix it if they refuse you can back out of the contract then. then there’s the appraisal if the appraisal comes back under what the selling price is your lender will only lend you the lower of the sales price or the appraisal. so the seller can back out here if the apprisal is to low and they don’t want to sell it for that price. once you back out though there’s a chance that you can lose your earnest money, which is essentially good faith money to show that your offer is a serious one. it’s not necessary to make an offer though however it does make an offer look better. if you do back out though they can go after your earnest money so don’t put in any money that you’re not willing to possibly lose.

  21. I’ve bought two houses and sold one. The first house I found through my own research and called a random agent to show me the house. I didn’t feel as though she did much to earn the money, but the seller paid the closing costs anyway. When I sold it I used an agent who was a retired police officer. I liked the guy right off and he really knew his stuff. I moved to a different area with the second home. I ended up buying a For Sale By Owner from people who had no business selling their own home. Luckily I’m an honest person so I didn’t screw with them… but it did appraise out for $35,000 over asking price/accepted offer. Clearly they could’ve paid a real estate agent many times with that extra cash. When I decide to sell I’ll consider doing a by-owner sale, but not without getting an appraisal first.

    I prefer small, local lenders with a vested interest in my property and well-being. They are less likely to stab you in the back. I live in eastern Washington and have no experience with them, but Sammamish Mortgage has caught my eye before with their rates. Ultimately, when it comes to real estate, the only person you can trust is yourself. Happy hunting!

  22. We loved the agent that helped us buy our house. She had a really good inspector that saved us on a house that was a complete disaster. We met her completely by accident at an open house and just clicked. If you’re interested I can give you her info! We also went through Cobalt Mortgage, they were really great to work with and had really good rates.

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