Doing Business With Friends and Family, or not?

By
Real Estate Agent with Paramount Realty & Funding

Seemingly everyone knows that friends and family are the foundation for building a successful real estate business.  They are your first line of customers and referrals.  Obviously most people in your sphere of influence will come to you when they need advice or services related to real estate.  What about those that don't?  People in your life whom you consider friends, or by bloodline or marriage, are family, who for whatever reason, don't bring their business to you.  Fortunately for most these occurences are rare.  However there are those people in our lives that for whatever reason don't give you their business. 
Personally I encountered this six months ago.  Friends I've known and been in constant contact with since High School (16 years), decided to move out of their apartment and buy their first home.  I found out that they had made their first offer at a wedding of some mutual friends of ours!  They had never owned a home and thus never worked with an agent or loan officer before.  When I reminded them that I was owned a real estate and mortgage company their response was "I know".  Stunned, I told them to call me on Monday and we'll go over everything and I'll see how I might help them save money... They were already working with an agent for that particular deal and I wasn't going to try and steal them away at that point.  However I offered my services as the loan officer and told them I could give them a better deal if my company were acting as the selling agent as well if this deal didn't go through.  On Monday we spoke, went over the terms of their proposed loan, and I told him that we could do better, saving him a couple of thousand dollars in origination.  Not only that, but he'd also have someone he knows and trusts doing his loan.  He said OK and that he'd call me later.  I never heard from him.  I didn't know what to do...should I call them and ask them what happened?  Should I try and reason with them?  I decided to let it go.  If they didn't want to work with me, for whatever reason, fine.  However, I also took offense to this since they essentially allowed a complete stranger to make money on the transaction, knowing that I feed my family doing the same thing!
Needless to say our relationship has become non-existent.  I really can't imagine doing what they did to me, to one of my friends or family members.  It could be just me but if I can support my friends and family by patronizing their business, for goods and services that I need, I will do it in a heartbeat.
I'm sure most of you feel the same way, but the question is this....how should a situation like this be handled?  You don't want to come across as begging for business, but if they don't go with you there's bound to be a level of resentment (at least).
Hopefully most of you haven't experienced a situation like this, but if you have please let me know your thoughts.  Thanks!

Comments (1)

Neil Schwartz
Century 21 Masters - Walnut, CA

That's interesting Kris. Even though this particular situation with you doing business with friends didn't work out the way you expected, do not be discouraged to continue going with it in the future. After all, if you work yoru sphere of influence the right away, it can count for about 10% of your business each year.

Aug 03, 2009 09:38 AM