Agent ratings: Can you trust them?
Americans love critiquing services online, but when it comes to rating real-estate agents, few reliable forums exist.
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The housing market may still be slogging through one of its most dicey and contentious times, but you would never know it from the tributes that have been pouring forth from the clients of real-estate agents in Texas. On page after page of the Houston Association of Realtors' website, which publishes ratings of local agents, happy consumers lavish breathless praise on their agents, using phrases such as "guardian angel" and "true gem." One agent is deemed a "godsend" by an effusive seller; another was "like a big sister holding my hand the whole way through." The Bayou City is even said to be home to the "best real-estate agent" ever — several dozen of them, in fact. In all, the agents in Houston earn an average rating of 4.94 out of 5. (Bing: Are consumer reviews overrated?)
Well, sort of.
In reality, that 4.94 represents the average score of just 12% of the association's agents. An additional 7% participate in the rating program but don't make their results public. The rest —around 17,000 real-estate pros — don't get rated at all, either by choice or because they haven't completed enough transactions.
The group surveys only customers who have closed deals, leaving out everyone who, satisfied or not, walked away. Those qualifications help explain why fewer than 0.3% of the Houston agents have been awarded a one-star rating by their clients — a figure that seems to defy reality, given all the things that can go wrong in a home deal. (The association says low-rated agents often opt out of the program.)
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None of this is lost on Patricia Gant, one of the lowest-scoring agents, who still earns a respectable 4.3 out of 5. She was 5-out-of-5 until a recent survey gave her a 1. The respondent said Gant was unresponsive and didn't have the seller's best interest at heart, which Gant denies. "I would've never sent one to her if I'd had any idea that she'd give me one star," she says.
When it comes to critiquing products and services, American consumers are spreading opinions online with abandon. Don't like the lobster bisque at your local seafood place? Air your displeasure on Urbanspoon. Love the way your new leaf blower chases away the neighbor's cats? Rave about it on Amazon.com. Indeed, according to recent surveys, more than one in four adults participates in scoring either services or products on some kind of rating site — all the more remarkable because such forums didn't even exist a decade ago.
But when shoppers turn to real estate, and specifically to the nation's army of nearly 2 million agents, the Web is practically a blank page; in many ways, critics say, it might as well be 1992. If consumers want to know how many homes an agent has sold, how long those homes were on the market, what they sold for versus the asking price and, especially, one agent's performance compared with those of his or her peers, there's no place online to dig up reliable answers. And the handful of real-estate industry groups that do offer some data aren't getting much in the way of competition or pressure from independent-review websites. Even on sites dedicated to service providers, agent ratings make up just a tiny percentage of the content. According to review site Angie's List, for one, the home-related fields of plumbing, heating and roofing are in the top five categories, but the real-estate agent category, the ultimate "home" topic, ranks No. 72. And while a few sites are geared specifically to agent ratings and reviews, they're generally tiny; most don't get enough visitors to be included in online traffic measurements.
Real estate, of course, is one of the biggest purchases most people ever make, which makes disclosing customer satisfaction all the more urgent. Despite the lack of resources, people have begun to do more of their shopping for real-estate agents online. In 2001, only 3% of buyers found their agent on the Internet; today 9% do, according to the National Association of Realtors. And in a stressed-out market, customers' displeasure with the service they're getting is running hot. The Council of Better Business Bureaus recently reported that complaints against agents leaped 26% last year over 2010. Common gripes include sellers who say their agent oversold a home's investment potential and buyers who didn't like the way their agent handled a bidding war. Regardless of the stakes, comparison-shopping remains rare. Almost two-thirds of consumers pick the first agent they interview and never get a second opinion, according to the NAR. "People put more time into choosing a Bluetooth headset" than they do into choosing an agent, says J. Philip Faranda, a real-estate broker in Briarcliff Manor, N.Y.
There was a time in the mid-1990s when the NAR appeared to be getting hip to the Internet. It invested a reported $13 million in a database called the Realtors Information Network, which was intended to have thousands of listings. But it failed to catch on with agents and was a financial flop. The network was revamped into what eventually became Realtor.com, which today is mostly a site for promoting home listings. In the meantime, the industry has remained generally leery about online information sharing.
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Indeed, it took a lawsuit by the Justice Department, settled in 2008, to get traditional firms and online brokerages to share information. (The department alleged that the lack of competition could lead to higher prices for consumers.) The NAR says the suit "had nothing to do with consumer access to online information," adding that although the group encourages customers to do research, "we try to remain neutral in terms of picking one Realtor over another." There's no doubt consumers can learn much more about homes online than they could five years ago, but most of those resources tell them relatively little about any agent's strengths, weaknesses or record.
The homebuying experience of Jessica Ko and her husband, James Lue, reflects the frustration that consumers can feel with so little to go on. Spotting a $1.4 million Craftsman home in Belmont, Calif., that struck her fancy, Ko – a user-interface designer – immediately checked out the listing agent online. That broker had all favorable ratings on Yelp, she discovered, but she couldn't find anything else. Ko contacted the agent, who told her that her firm represented the seller but that she could help the couple negotiate the deal. Yet when Ko asked about lowering her bid after the appraisal revealed smaller overall square footage, the agent discouraged it, Ko says, and she ended up paying full price. She has since learned that cases of so-called designated agency, in which a brokerage represents both buyer and seller, often end up with higher sale prices. (The brokerage says the arrangement was clearly explained to the clients, to avoid "any inherent conflict of interest.") Ko now says her biggest regret is that she didn't do enough homework on the agent.
Agents have no shortage of reasons for being reluctant to air their history. Few real-estate transactions go off without a hitch, and the process can leave consumers frustrated. Buyers and sellers with multiple transactions under their belts are relatively rare, pros say, making many reviews uninformed or naïve. Jay Thompson, director of social media at real-estate website Zillow, says that although he doesn't object to ratings, "a lot of things are out of the agents' control." And a pilot review program in California is hitting a different snag: Only 19% of the more than 150,000 agents in the state's Realtors association have enrolled, says Don Faught, president-elect of the association. In fact, he adds, the effort may not even be funded after this year.
after having a home up for sale for some time now,,
i have learned that these real estate ratings for agents are a joke