My friend told me…

By
Real Estate Agent with eXp Realty LLC 200311024

Oh, the words I really don’t like to hear from a buyer or a seller. You know the phrase “My friend told me…” Now, I was talking to a buyer on the phone the other day about a home they were looking at and about what was the best way to finance it in their situation.

I gave them the advice I had for them since they didn’t qualify for a traditional loan, that they really only had a few other choices. Those other choices were lease option, owner financing or just wait. There was one more and that was assume a loan, but that wasn’t an easy one since they didn’t qualify for a loan right now and you still have to get qualified for most assumptions of a mortgage.

Taking real estate advice from friends and family

They told me that they would talk about it and get back to me. The next day they called and said “We talked to our friend and she said lease options and owner financing are illegal” I said “That isn’t true, do you mind me asking where your friend got your information?” They said “She used to be a real estate agent.”

I said “Do you think there might be a reason she “USED” to be an agent? Lease options and owner financing are certainly aren’t illegal in fact they are done every day and do you think if they were illegal you could actually get the contracts at any store that sells contracts? I’m going to give you the number of two real estate attorneys and you make the call and ask them if they are illegal. I promise you are going to find out that you are hiring me for knowledge and I’m great at what I do. I don’t want to offend your friend, but it was mis-information like this that put a lot of agents out of the business the past couple years.”

These buyers have since put an offer in on a property using owner financing and are no longer taking advice from their friend. She later told me it was hard to correct her friend and had to basically tell her friend that she couldn’t trust her advice since she was as wrong on something as simple as owner financing or lease options. I told her there was nothing simple about owner financing or lease options, but there was a reason so many people left the business in the past few years.

Comments (13)

Sidney Kutchuk - Realty Works Temecula Kutchuk - Realty Works Temecula
Realty Works Temecula - Temecula, CA
Realty Works Temecula

Todd:  Taking advice from a friend, or relative that is not currently licensed or working in the field the advice is needed is never a good idea.  But it seems real estate is one of those topics that anyone and everyone is an expert!  

Jan 16, 2012 03:53 AM
Melissa McKinney
McKinney Realty Group - Fayetteville, NC
Realtor, www.LivingFayetteville.com

Todd~ Like the way you handled the issue, and now you know that your clients know that you know what you are doing!! Just tried to throw in a little tongue teaser LOL!

Jan 16, 2012 03:55 AM
John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Suggested and Amen!  I can so relate to "My friend told me..."  UGH.

Jan 16, 2012 04:02 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hi Todd -- I like the way you handled this.  Used to be(fill-in-the-blank) can certainly be a red flag.   

Jan 16, 2012 04:17 AM
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

I can't remember the last time I saw an assumable loan. I think the last time I did see an assumable loan the bank had a points structure than after my clients paid the points involved they couldn't afford to pay the Seller's equity... 

Jan 16, 2012 04:40 AM
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

OBTW, I always pucker up when I hear "I was talking to a friend and

Jan 16, 2012 04:43 AM
Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Todd, love that it ended well. Friends are so "helpful". Not. LOL

Jan 16, 2012 09:42 AM
Susan Neal
RE/MAX Gold, Fair Oaks - Fair Oaks, CA
Fair Oaks CA & Sacramento Area Real Estate Broker

Hi Todd - God save me from well-meaning (but ignorant) friends!  Right now I'm working with buyers who are anxious to buy something and close soon, so I have been looking at non-short sales.  But I got a call today from my client who tells me that her friend just bought a short sale not long ago and it took no extra time. 

Her friend says that short sales don't take more time than equity sales any more.  I tried to explain why her friend might have lucked out with her timing and which lender her seller happened to be working with, and I'm not sure she believes me.  So now we are looking at short sales.  I think she'll have to experience it to believe it.

Jan 16, 2012 11:46 AM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Todd,

Maybe I should keep quite? I  “USED” to be an agent.

That I know of, there is no place where informal assumptions are illegal, it's a violation of a civil contract, not a crime. But there are states that require specific disclosure forms. Then there is Arizona and a couple of others. Arizona's attorney general has prosecuted several people for conspiracy-to-hide such a transaction!

Check your state's laws!

Just one former agents opinion.

Bill

Jan 16, 2012 01:40 PM
Tatyana Makarov
Coldwell Banker Residential Brokerage - South Windsor, CT
Your Greater Hartford Area Realtor

Oh, not again!!! I've heard it soo many times. It is amazing how people listen to anybody, but their realtor... You handled it well.

Tatyana.

Jan 16, 2012 02:06 PM
Fred Carver Personal Real Estate Corporation
RE/MAX Camosun Victoria BC Real Estate - Victoria, BC
Accredited Real Estate Consultant

Hi Todd....when I was young I sold life insurance, and third parties always killed our sale....Why, When you ask someone if you should do this or that, they'll say "no don't do it" fearing that if anything goes wrong you blame them.

Jan 16, 2012 03:52 PM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Oh boy!  I cringe when I hear that, or my neighbor told me, etc.  Usually very wrong and misleading.

Jan 16, 2012 10:54 PM
Todd Clark
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

I'm glad to see everyone is sticking with their plans and I home now that we are about to go in to month 2 of 2012 that you still are sticking with it. Lana, can't wait to hear back after 6 months how it went.

 

Jan 27, 2012 06:36 AM