If they were looking for someone to handle the biggest financial transaction of their lives, you’d think that most people would ask for something more substantial than a thumbs-up from the guy down the block.
Not that neighbors aren’t to be trusted — friend-to-friend recommendations hold a time-honored place in the marketplace, and recent studies show them to be the most-often-used method of finding an agent.
But in this age of sliding property values, rampant mortgage fraud and widespread angst over that former sure-thing called real estate, there’s plenty at stake here. Shouldn’t you snoop that real estate agent a bit more before signing on any dotted lines?
After all, consumers these days routinely go online to scope out restaurants, hotels and even medical care. Real estate agent credentials and reputations are out there to be had, too, and the curious can go way beyond merely Googling a name.
The real estate industry has been slow to realize how much consumers now depend on the Internet to vet the professionals they work with, says Marilyn Wilson, an industry consultant with the WAV Group in Arroyo Grande, Calif., who has published research on the concept of "reputation sharing."
"There’s transparency everywhere these days, but you can get more information about your book on Amazon.com than you can about your Realtor," she said.
"Doctors and lawyers are doing it, but (real estate) has resisted it significantly. They’ve been afraid of it."
Nonetheless, information is out there. Although recent research from the National Association of Realtors showed that only 3 percent of consumers actually found their agents through online searches, a far larger percentage seem not to be averse to poking around to check them out: A recent study by Yahoo.com found that nearly 40 percent of consumers are going online to learn about agent reputation. But as with everything else on the Web, some sources are more credible than others.
But where to begin? Set aside, for a minute, issues of market expertise, communication and other job skills. Does your agent actually possess a real estate license?
You might be surprised. In California alone, that state’s Department of Real Estate between 1998 and 2008 issued more than 750 cease-and-desist orders to companies engaged in real estate sales that lacked licenses. …CONTINUED
Fortunately, there’s a simple way to check. State governments maintain sites devoted to identifying real estate license-holders; a central source for state-by-state links (as well as for regulators in Canada and many other countries) is the Association of Real Estate License Law Officials, www.arello.org.
Beyond basic legal status, many states also post disciplinary and licensing-revocation actions, some of them describing agent transgressions in alarming detail. Some state sites offer further background: Texas, for instance, lists courses agents have taken to fulfill continuing-education requirements.
If neighbor-to-neighbor recommendations are still king, Internet social-networking sites such as MySpace, LinkedIn, Facebook and others have elevated over-the-back-fence chats about agent performance to the level of public forum. The sites are afloat in testimonials — good and bad — from previous clients. Even Twitter, the microblogging site, is a source of quick takes on individual agents’ performance.
Rapidly proliferating are the rate-this-agent sites, of which there are probably a couple-dozen. They vary wildly in consumer usefulness, from being insightful to being thinly disguised forms of advertising.
"A lot of them are pay-to-play," says Wilson. "The way (some) work is: the agent says, ‘I’ll give you $29 a month, or whatever, to tell consumers I’m a good agent.’ "
Such sites, for a fee, work as "lead generators" for agents. They’ll post an agent in the No. 1 position for a user who’s seeking an agent within a given geographical area, along with a bio and other background. On some of the sites, the agents access the consumer-contact information to drum up business.
Other sites have more complex arrangements and vary widely in the level of consumer participation. They may solicit consumer content, but don’t post negative comments. Some allow participating agents to edit the consumer feedback. Some rank agents simply by tracking the number of closed transactions. On many of these sites, browsing deeper into the "about us" areas may clarify the method of review-gathering.
Some sites are entirely independent of the industry, such as Angie’s List, which posts consumer reviews of a variety of professions.
Andrew Colton, a former ABC News correspondent, founded OutrageousAgents.com two years ago after a frustrating experience. As its name would imply, comments that pan individual agents predominate, though Colton said there are positive reviews, too.
"I wish there were more," he said. "I know there are good, if not great, agents out there." …CONTINUED
The site has been criticized in the industry because its postings are anonymous, though Colton said agents are free to respond online. He said the site also monitors postings to remove those that seem malicious.
Within the industry, there are some efforts to be transparent. Many brokerages conduct consumer-satisfaction surveys, though most don’t make the results public.
ZipRealty.com, however, surveys consumers about their satisfaction levels after closings and converts their responses into a "star" system, posting one star (for completely dissatisfied) to five stars (for completely satisfied).
Redfin also surveys consumers, and agent compensation is tied to satisfaction ratings. On Redfin.com, agent profiles display both the transaction histories and unedited customer reviews. They’re not always as glowing as the company would like, according to company spokesman Scott Nagel.
"Every agent gets one or two, every once in a while, where it’s less than positive," he said. "But we don’t want to be perceived as cherry-picking. That’s how credibility goes right out the door."
This spring the Houston Association of Realtors rolled out an online agent-review feature for closed transactions at HAR.com. Participating agents are rated on a five-point scale.
So far, about 1,800 agents of the 22,000 members of the association participate, which chief executive Bob Hale regards as a good start. Once the agents opt in, though, all of their ratings are posted — both good and bad — he said.
He admits that the service might have better reach if it could survey consumers who never made it to the closing table — who might have walked away or if the transaction went awry for perceived agent problems, for example.
"We may look at that in the future if there’s some way to do that, but we don’t have access to that data now," Hale said. "We’re off and running now at what I consider a good start. You have to go in baby steps on something like this."
Mary Umberger is a Chicago-based freelance writer.
***
What’s your opinion? Leave your comments below or send a letter to the editor.
