Last year it briefly looked as though Seattle brokerage Redfin had broken down the information barrier. It released Scouting Report, an online tool that provided performance data on more than 1 million agents, based on information from the multiple listing services — databases of real-estate listings and transactions available only to real-estate pros.
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Scouting Report showed consumers, for the first time, information that brokerages have long kept close to the vest: how many homes an agent sold in the past three years, how long it took them to complete a deal and how successful they were in negotiating prices. Some consumers immediately leaped to use the tool. When Mark Roberts was selling his Washington, D.C., home, he found a slew of mistakes in the contract. Through Scouting Report, he learned that the buyer's agent had no experience in D.C., information that headed off misunderstandings. "It helped get the deal done," he says.
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But as many infuriated agents pointed out, the sources of Scouting Report's data — the listing services — were unreliable. Many transactions didn't get registered in the databases, so agents didn't get credit for them on Scouting Report. Similarly, an agent who was part of a team may not have gotten credit. Within a week, Redfin took down the tool. "It went down in the history books as our great defeat," says Glenn Kelman, Redfin's CEO.
This spring, NeighborCity, a referral and brokerage website in San Francisco, launched a similar tool that ranks about 850,000 real-estate agents on a scale of zero to 100 based on more than a dozen attributes, such as number of listings sold and how close the sale price was to the asking price. It gets this information from a mix of public records and data from brokerages, CEO Jonathan Cardella says. But like Redfin's, the site has caused a ruckus. In April, MLS companies sued NeighborCity, alleging that it used data and listing information without their authorization. (The litigation was partially funded by the National Association of Realtors, which says the suits are "of significance to the industry.") Cardella says the site tried to get the data from the services but had to turn to the brokerages after the MLSs denied them access. "It's not by coincidence that there's a concentrated effort among MLSs for agent ratings and rankings not to become public information," Cardella says. NorthstarMLS and Metropolitan Regional Information Systems, the MLSs bringing the suits, declined to comment.
The nearly 900 MLSs operate with separate standards, which means problems can start with the listings themselves. While some agents measure a house room by room, others rely on property-tax records, which may not be up-to-date, so it's not unusual for the square footage to be smaller than what an agent's listing sheet says. Because the listings primarily serve as advertisements for prospective buyers, it's not likely that anything negative will pop up. "You're never going to see a sheet that says, 'A triple homicide happened here,'" says Jack McCabe, a real-estate consultant in Deerfield Beach, Fla.
The lack of uniform reporting, industry insiders explain, also lets agents tinker with certain numbers. Frank LLosa, a broker in D.C., says it's not uncommon for an agent to take a listing off the market for a day, only to relist it under a different MLS number. The switch can make it look like a new listing, because many sites use that number to calculate how many days a home has been on the market. Another popular measure of a selling broker's skill, the sale-to-list-price ratio, can also be misleading. If an agent lists a home at $500,000, drops the asking price to $450,000 and sells it for $445,000, he could report that it sold at 99% of list price -- not at 89% of the original price. Some brokers confirm they do just that, saying it represents the market more accurately. But critics say the practice just inflates an agent's performance. "Without a uniform way of reporting sales, everything is questionable," says Michael McClure, a broker in Plymouth, Mich.
A few groups are after the real-estate consumer holy grail: ratings that don't rely on listing-service data. On Social Search, a feature of real-estate portal Trulia, consumers can find agent recommendations via Facebook. Still, only about half of reviews come from homebuyers and sellers, Trulia says; others are from fellow agents or family and friends. Take Los Angeles agent Jane Peters, who has the most recommendations of agents in her area. Not one of her 17 reviews comes from a former client. Peters says she asks clients to recommend her only on her own website, rather than pestering them for multiple reviews.
Other would-be activists are operating on a smaller scale. Michael and Krista Becker say they rarely make a decision without reading online reviews, whether searching for gluten-free restaurants or puppy schools. But when the couple tried to find a real-estate agent to sell their condo on the outskirts of Philadelphia, they went with a friend's suggestion — and ended up regretting it, ultimately firing the agent. Instead of whining about their experience at cocktail parties, Michael Becker, a Web developer, built an online directory of real-estate agents called MountainOfAgents.com and launched it last summer. People can search for agents by ZIP code and see how consumers rate agents on attributes such as "market knowledge" or "helpfulness."
The site has its flaws, however. Agents can "reserve" a ZIP code for $35 for three months — Becker's way of generating revenue. Agents who buy in stay on the first page of search results, regardless of how good their ratings are. There's also no space for comment. And because Becker doesn't have access to MLS data to prove that a client worked with an agent, there's no way to tell whether an agent is getting five-star ratings from his bowling team or grandma. In a bid to get around such problems, Becker's company teamed up with a service called Verified Agent, run by McClure, the Michigan agent. To earn verified status, an agent must have completed at least 24 transactions in the past three years and have 10 client recommendations. At the moment, though, the service won't confirm how many agents are verified; it recently lowered its price, perhaps in an attempt to attract more participants.
For now, most of these efforts remain little more than embryonic. Still, the Houston Association of Realtors, at least, is galloping ahead with its online ratings program — with or without agent support. The association requires those who opt in to the program to survey their clients within 10 days of a transaction. If they don't, they get a reminder giving them an additional five days; after that, the agent is suspended from the program until the surveys come back. Wayne Stroman, the group's chairman, says he has used a variety of software and Web tools to boost the business of his own firm, Stroman Realty. The way he sees it, agents had better get on board.
"If Realtors don't put together their own system, someone else will, because consumers want ratings," he says. "They're not going away."
after having a home up for sale for some time now,,
i have learned that these real estate ratings for agents are a joke