How Much Influence Should Outsiders Have on a Real Estate Transaction?

It just happens sometimes.  It's nothing you've done wrong.  You get the sellers to agree to a reasonable price, then their neighbor says, "Wow!  That sounds really low to me.  Is your agent just trying to get the house sold quickly so they won't have to work at it?"  The seller calls you with questions, and there is suspicion in her voice. 

 

Or perhaps you have worked really hard to negotiate on behalf of your buyer client, then his dad tells him that he is paying way too much.  How can he possibly afford that house on his salary?  He hasn't even paid off his student loans yet!  Well, this is the kind of thing that makes you so valuable ot the transaction.  You are probably going to "earn your money" here.

 

 

The amount of influence that a family member or friend holds over the transaction is inversely proportional to how badly you need the commission.  In other words, if you need the sale badly, that's when a random "expert" who has your client's ear will step out of the shadows to offer advice on the situation.  Maybe they used to be an agent back in the 70's.  Maybe they just bought a home and they are wary of the bad things that some agents do.  Whatever the case, it can often be difficult to overcome these types of objections.

 

In basic sales training at many brokerages, they cover the rudimentary objections that we often face in the field.  However, I haven't seen this specific topic addressed.  Frankly, this is easier to address on a case-by-case basis, but there are some broad rules to follow.

Here are some other examples to ponder:

  • What do you do if your client's mother tells him not to buy in that area of town where you have already finished finalizing the paperwork and you are set to close?
  • What about the FSBO across the street that just went up for $30,000 over market?  It makes your listing seem underpriced by comparison. 

These are two real-life experiences that I have had in the past month.  In the first case, I simply told his mom that the area of town was the only place where you could find a home that was suitable at the desired price.  The buyer had obtained custody of his two small children, and they needed a decent sized home and yard to make it work for him. 

In the case of the FSBO, since it wasn't someone really close to the seller (who happens to be my cousin in this case), I told him that the guy across the street was insane, and that he would never get anything close to that price anytime soon.  Were these harsh words?  Yes.  Was this the truth?  Without a doubt. 

My general rule of thumb when dealing with well-meaning friends or family members is to politely yet firmly remind them that I do this EVERY DAY, and that I am their representative, and as such I am obligated to look out for them ahead of what I want/need.  I never have to push very hard.  The truth works wonders.  Perhaps you will have to spend more time than is normal to salvage the deal, but it is certainly better than starting from scratch or losing the client altogether.

Don't let your buyers or sellers be misdirected by those around them.  Remember that you are the expert! 

 
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47 Comments on How Much Influence Should Outsiders Have on a Real Estate Transaction?

When an agent tells us the buyer wants to bring their family you can hear everyone sigh and most always say "Deal Killers". They listen to their family and sometimes lose the house of their dreams because they want to make crazy offers.

09/17/2007 03:22 AM by Candice Joyner (RE/MAX RIGHT WAY)


Jason I have had family members tell first time buyers not to buy so big a house. I tell them if the price is in your comfort zone and the payments are affordable why would you want to buy only to sell in 3-4 years when you start a family.

09/17/2007 03:54 AM by James Gordon REALTOR® PBD SRS (Sibcy Cline Realtors®)


Family members usually have some kind of influence (or rather, opinion) on what, where and price on what the buyers are doing, especially with first time home buyers.  I don't mind at all when a family member comes along to view homes or to an inspection, but I have a difficult time when a family member who doesn't know this industry and hasn't purchased a home in 30 years tries to tell me what is going on.

 

09/17/2007 04:04 AM by Kris Wales- Metro Detroit real estate agent-Chesterfield Twp-Macomb County MI (RE/MAX Advantage 1, Inc.)


This is always a fun issue. I agree with how you handled it. Confidence is the key.

09/17/2007 04:11 AM by Century 21 First Realty


Let's not forget the advice from a distant relative in another state that just got their real estate license! I love those!

09/17/2007 04:17 AM by Paul Francis, Broker,ABR,CRS | Barrington Illinois Real Estate (Suburban Village Realty)


You are obviously a pro because your strategy is right on in my opinion.  You are the expert.  Demonstrate it by  dealing with any objections head on.  At times those objections may be right on target, but perhaps don't fit the particular needs of your client.  Just because a family member is speaking in their ear doesn't mean they are listening.

09/17/2007 04:45 AM by Ginger Wilcox, Marin County Realtor (Pacific Union, Marin Real Estate)


Jason, I had a client earlier this year, a young woman, whose every decision had to be cleared with Grandma.  Grandma was providing the money for the down payment and was the matriarch of the family and at age 80 something was presumed by my client to know everything about purchasing a home, even though she had not done so for the last 30 years and lived in upstate NY and probably never been to Virginia, let alone purchase a home here.  Every step of the process was dictated by Grandma.  In a non-offensive manner, I used your approach telling my client that "look, hey I'm the expert here."  She understood and got Grandma to back off a bit.  The deal went through smoothly in the end.

09/17/2007 05:04 AM by Brian Block -- Northern Virginia & D.C. Real Estate (RE/MAX Allegiance)


JASON:  There is nothing worse than the advice from the former agent, although I do love the picture of him.  I know that we use this comparison all of the time, and I'm sure doctors probably think that we're crazy, but would you take medical advice from someone that used to practice medicine but hasn't in years.  Isn't is possible that things have changed a bit since agents were the gatekeepers and held their MLS books closely guarded?  As far as a FSBO, or any other new listing (even with the overpricing agent), I would explain to them that just because somebody thinks that they can get a certain price, doesn't make it any more true than it was when we priced your home to begin with.  Not only to FSBO's fail to compare sold homes when determining price, but they also put in a lot of padding so that there is room to negotiate.  You did the right thing in both cases.  FSBO's are probably the root of why we get questioned so much.  Not specific FSBO's, but the idea that you can theoretically sell your home on your own has created a lot of armchair QB's.  By the way, our QB look great again yesterday.  Go Boys.  Good post Jason.

09/17/2007 05:16 AM by Adam Waldman - Long Island REALTOR® (RE/MAX Best)


Yep,

Sure deal killers. When ever this happens, I generally start backing off because it is no longer worth my time.

09/17/2007 06:19 AM by International Financing Solutions / Mortgage Professionals


Jason, that is always a dilema when they are first time home-buyers and want their parents to "approve" the home. We cringe, some parents are supportive and some have killed the deal. The kids get caught in the middle.I'm going to TRY to keep my mouth shut when my kids start to buy. LOL

We just closed one where dad and sister were attorneys, now that was fun !!

09/17/2007 06:28 AM by Missy Caulk Ann Arbor Real Estate (Keller Williams Ann Arbor, Michigan)


The fact is outsiders should not have any influence, but the reality of it is that many outsiders do influence the decisions of the seller as well as the buyer.

09/17/2007 06:35 AM by DDR Realty, Orange County, NY


Jason, sometimes it works in reverse.  I have clients who lost their home in Hurricane Katrina and have been living with their son & daughter-in-law for 2 years now.  The kids are VERY encouraging about them finding a home :)

09/17/2007 06:59 AM by Lisa Heindel, New Orleans West Bank Real Estate (Latter & Blum Inc. Realtors)


Jason, This was interesting for me to read because I'm not a realtor and had never thought of it.  But I do know of several friends who have been renting for more years then I can remember and every time they went to BUY a home they were discouraged by a family member. What a shame, all that rent money just gone when they could have owned.  It's nice to hear that you stick to your convictions.

09/17/2007 09:44 AM by Carole Provenzale Owner, Feng Shui Long Island (Feng Shui Long Island)


Good post friend. Excelent advice.

 

Lemon: a car I had after college

09/17/2007 10:19 AM by Alan Kirkpatrick Austin Texas Real Estate (Austin Texas Homes)


Hey Jason:

 Just broke 10000 on AR. Yea.

Currant: The waters power and path in Baton Rouge

09/17/2007 11:23 AM by Alan Kirkpatrick Austin Texas Real Estate (Austin Texas Homes)


CANDICE - Thanks for reading and for your comments.  I think the only way to overcome potential deal killers is to be firm and honest. 

09/17/2007 11:37 AM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


JAMES - I guess I'll never understand that particular view (home is "too large").  When I bought my current home, it was double the size of our previous home, but we knew we probably wouldn't ever outgrow it.  However, now that we are considering having a fourth child, that may not be the case.  At any rate, I always figure you might as well buy a larger home if you can afford it.  It also helps with the resale value!  Thanks for reading and for your accurate comments.

09/17/2007 11:39 AM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


KRIS - I also certainly don't have a problem with family members giving some input, but sometimes their views are not in line with reality.  Friends who have recently had bad experiences with Realtors are also among the worst/most difficult to overcome.  Thanks for commenting!

09/17/2007 11:41 AM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


JOE - Thanks for commenting.  You are correct - confidence is the only way to handle this.

09/17/2007 11:50 AM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


PAUL - Thanks for your funny comment.  There are so many variations on this theme that it would be hard to name them all here: relative with license, friend in another area with a license, friend who just bought or sold, relative who hasn't bought in ages, etc. 

09/17/2007 11:52 AM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


GINGER - Thanks for the comments.  You're right - sometimes the advice is sound, but it may not apply in this case.  I actually had a client last month whose parents had to co-sign at the last minute because of the change in mortgage guidelines.  She showed up at the CLOSING wanting to negotiate more with the sellers on some small items.  The first words out of my mouth were, "Well, there's no more negotiating to be done in this case.  We are about to sign the papers.  The negotiating was done a few weeks ago."  She seemed to respect that, because she signed everything without complaining.

09/17/2007 11:56 AM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


Jason

I always like your content because its REAL!

The truth works wonders....yes it does....which is why you make your deals happen, and others right now are starving. Great job all around.

 

09/17/2007 11:58 AM by Bill Nazur (Nazur Enterprises, Inc. & BAMG)


BRIAN - That is a tough one, especially when you are dealing with someone providing actual funds in the deal.  Their beloved grandmother wouldn't steer them wrong, right?  I have had a few similar experiences - usually they work out best if you show respect for the relative, but explain clearly what the real situation is.  Well done!

09/17/2007 12:00 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


ADAM - Good comments (of course).  Even though the physician thing may seem trite, it is still accurate.  Glad you liked the photo of the former agent that I found.  As for the Cowboys, wow!  Tony Romo really looked like Favre, and apparently Favre also played like the old days beating the Giants soundly.  Bring on the Bears!  I hope they can make Grossman look as confused as Trent Green did yesterday.

09/17/2007 12:03 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


SEAN & PILAR - I guess the point of the post was not to back off, but to face this kind of thing head-on.  I have salvaged millions of dollars in sales over the years by just being firm, direct, and honest.  You don't have to run from these deals.  In most cases, they will work out, but it may take you some extra time.  I suppose it depends on what other business you are handling, and whether or not you have the patience to put up with it.  Thanks very much for your comments!

09/17/2007 12:07 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


DERRICK - That's right.  I don't mind when outsiders participate, but it is sometimes important to remind them why you are there in the first place. 

09/17/2007 12:15 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


LISA - That's funny.  I bet they really are encouraging!  Thanks for your comments.  I LOVE my mom, but two years would be a bit much for anyone to endure. 

09/17/2007 12:16 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


CAROLE - Even as someone not selling homes, you can see the debilitating effect that outsiders can have.  Often, as you mentioned, it leads to wasted money or time (or both).  Thanks for reading and for your great comments!

09/17/2007 12:19 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


ALAN - I am glad you liked it.  Thanks for stopping by!  Congratulations on hitting your first big milestone on AR (and thanks for the 1,000 points).  I crossed the 30,000 mark while I was out of town.  Talk to you soon!  Go Cowboys!

09/17/2007 12:20 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


BILL - Thanks for the biggest compliment I have received this week.  I appreciate you taking time to read and to make these remarks.  I have always felt that integrity pays off in the long run, even if you sacrifice a deal or two along the way. 

09/17/2007 12:22 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


I'm so glad you posted about this.  It's an awful experience.

I had a client that was in two ugly sub-prime loans.  I was refinancing her primary residence and her investment property into two great loans that were going to serve her well over the long-haul.

Suddenly her boyfriend and brother started telling her that the costs of the refi were too high.  I politely told her that her boyfriend and brother should come and meet me in my office so that I can show them exactly why the rate/terms of the loan I was giving was best for her.

They wouldn't meet with me, so I stepped it up a little.  I told her, "Where were your boyfriend and brother when you got these two awful loans you have?  Are you sure you want to trust their advice without meeting with me in my office?"

It didn't work.  I lost the deals and she went on to someone else.  I only hope that person did a good job for her.

09/17/2007 01:28 PM by Hemet Home Loan Guy, Joey Aszterbaum (Patrion Mortgage)


JOEY - Yes, this kind of thing has happened to all of us at one point or another.  Good comments!  It sounds like you handled it correctly, although the second part might have been too pushy for them.  I have said things like this to clients many times - sometimes it works out, sometimes not. 

09/17/2007 04:07 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


How about the one from the neighbor two doors down who thinks you have the home priced too low and that the entire neighborhoods value is going down because of what you did! yes, a recent one but mind you my clients house sold in an older neighborhood while all the others remain on the market 90+ days. Now I am getting phone calls from those who are currently listed asking for advice. Sometimes you can't win.

09/17/2007 05:48 PM by Meridian Idaho Real Estate - Donna Lueder (Integrity Group Inc. )


DONNA - This seems to be one of the most frequent offenders.  They need to understand that we do this all the time, and that it is not to our advantage to underprice their home.  Good story - thanks for commenting and for sharing it here!

09/17/2007 05:55 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


These scenerios are probably a real problem for agents without credibility...I guess if you do a good job being credible, those little road blocks are more like speed bumps.  Thankfully we usually have the data to  backup our position and then if that fails us, we always have our credibility...my blank stare is pretty effective too! :)

09/17/2007 06:41 PM by Shannon Lefevre Naples, Florida CRS (John R. Wood REALTORS Inc.)


SHANNON - I like the "blank stare" comment.  I need to try that one next time!  Thanks for your comments (as always). 

09/18/2007 12:02 AM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


My typical response is, "Oh, how long has [boyfriend/neighbor/Dad] been practicing real estate?"  BTW... it helps to use your 'sweet voice' when saying it. I'd hate to loose MY credibility :)

Reminds me of that dumb game show "Deal or No Deal"!

09/18/2007 11:41 AM by Portland Oregon Real Estate Broker * Jennifer Bukaty * (Bridgetown Realty, Inc.)


JENNIFER - This can be a good response, as long as you can say it without any sarcasm at all (which would be very difficult for me under these circumstances).  Thanks for your comments!

09/18/2007 11:51 AM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


Jason, I enjoyed your post and the comment stream. I sell businesses. All the buyers think that they have to run the "deal" past their attorney and their CPA. These are bigger deal killers than friends and relatives any day. Oh so much fun!

Bill Roberts

09/18/2007 12:33 PM by Bill Roberts - "Baby Boomer" Retirement Planning (Brooks and Dunphy Real Estate)


BILL - This is spot-on accurate.  You should write a post about that.  Attorneys can be some of the worst offenders in this arena, although we very rarely have to deal with them in residential real estate.  If you choose to write a blog about this topic, feel free to come back here and put a link in the comments section.  Thanks for your comments!

09/18/2007 03:57 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


Thanks Jason, for the offer. I gotta think about that though. It just might be too negative. Maybe something like "Deal Killers Gone Wild" along with pix?

Bill Roberts

09/19/2007 12:20 PM by Bill Roberts - "Baby Boomer" Retirement Planning (Brooks and Dunphy Real Estate)


Jason,

A good point you bring up. This happens all the time, even in the lending side. Without you getting upset about it, what often works is a calm approach and a few questions about the family advisor's professional background. And then you can add that you do this for a living, so you are the pro.

09/19/2007 12:46 PM by Esko Kiuru - Las Vegas NV Mortgage Consultant (Sinifox Financial)


BILL - I like the concept of "Deal Killers Gone Wild" myself - why not try it?

ESKO - That is spot-on accurate!  This is the perfect approach to take.  Thanks for reading and commenting!

09/19/2007 02:16 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


Hey Jason, the best way to handle such objections is to raise your voice and curse profusely!!!  Then tell them that you do not want to work with them anymore and refer them to me. j/k

Here's what I always tell my clients with know-it-all friends/family: "Oh, so is your Uncle Timmy in real estate?....then don't say anything and let them think about it.  Works pretty well.

Take care, bud!

09/20/2007 12:41 PM by Austin Referral Realty


RONNIE - Thanks for stopping by to comment.  Wise words indeed!  I will use the loud cussing next time.  I think it will work better (for you, as you will get a referral).  I have said similar things - "How long has _______ been licensed?" or "Where does _____ live?"  Many times, they are getting "expert" advice from someone who lives several states away in a completely different type of market.  Take care -

09/20/2007 12:44 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


Jason, you asked for it, you got it: Deal Killers Gone Wild

Bill Roberts

P.S. I quoted you so you better check the quote.

09/21/2007 08:31 PM by Bill Roberts - "Baby Boomer" Retirement Planning (Brooks and Dunphy Real Estate)


Bill - Thanks again for the quote and "feature" on your post.  I really appreciate it.

09/22/2007 07:53 PM by Jason Crouch, Broker - Austin Texas Real Estate (Austin Texas Homes, LLC)


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Real Estate Agent: Jason Crouch, Broker -  Austin Texas Real Estate (Austin Texas Homes, LLC)
Jason Crouch, Broker - Austin Texas Real Estate
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