California Realtors launch agent ratings pilot program
MLSListings Inc. working with third-party vendor to collect client feedbackThe California Association of Realtors is getting behind the concept of agent ratings and reviews, sponsoring a pilot program with a multiple listing service in California’s Silicon Valley in which clients of participating agents are sent customer satisfaction surveys from a third-party vendor whenever a transaction closes.
Although it will be up to the agents whether the survey results are displayed to the public, brokerages will be able to use the client reviews to spot problem areas for agents to work on, backers said.
Six brokerages belonging to Sunnyvale-based MLSListings Inc. are participating in the pilot program, which CAR says is aimed at developing an industry standard across Northern California for measuring real estate agent performance and customer service.
Brokers from Intero Real Estate Services, Bailey Properties, Alain Pinel Realtors, Sereno Group, Realty World and Legacy Real Estate have volunteered to participate in the pilot program.
Some of the brokerages participating in the pilot are requiring that all of their agents be rated by their clients, said Jim Harrison, president and CEO of the 18,000-member MLS. Others are allowing agents to opt out, he said.
“We just launched this a few weeks ago” with funding from CAR that should last about a year, Harrison said. “The objective is to see if there is enough interest in the marketplace to make it a permanent service.”
A CAR spokeswoman declined to say how much the association is spending on the program.
Consumer reviews can be a double-edged sword. While good reviews can be a boon for an agent’s business — Realtors often incorporate glowing testimonials from clients in their marketing — some fear their business will be harmed if they’re unfairly maligned online.
In December, Zillow.com began allowing consumers to rate agents they’ve worked with in the past. Other sites facilitating agent ratings or reviews include include Redfin, ZipRealty, Homethinking, AgentRank and Yelp.
The Houston Association of Realtors also offers an agent ratings tool that allows past clients to rank them using a five-star rating system. Agents can opt out of the system.
Although HAR says its agent ratings have been a success, the MLS last year pulled the plug on “Realtor Match,” another tool that allowed consumers to see which agents had the most transactions and listings in a particular ZIP code or neighborhood. There was no opt out of Realtor Match, and some agents objected that it would hurt their ability to compete with more established agents.
In the CAR-MLSListings pilot program in Northern California, it’s up to agents to decide whether to make public the results of the customer satisfaction surveys, which are conducted by Quality Service Certification Inc.
Third-party rating service
Based in Orange County, Calif., QSC provides similar services for about 60,000 real estate professionals nationwide — in most cases through contracts with brokers, said CEO Larry Romito.
Improving customer satisfaction not only helps agents land referral and repeat business, but can also reduce the risk of consumer complaints and lawsuits, Romito said.
“There is a lot of talk … among brokers about customer service, and how can you deliver better service in an independent-contractor environment,” Romito said. Some brokers, he said, are frustrated that “sometimes they can’t even get agents to fill out forms that are required by law.”
So when it comes to getting agents to devote more effort to customer service, he said, some brokers have concluded, “Why even try?”
Romito — a former NRT executive who founded QSC in 1998 — said that’s a mistake. Brokerages can get their agents focused on customer service by spelling out a process for providing it, and holding them accountable, he said.
Agents participating in QSC’s review program sign pledges to homebuyers and sellers listing more than a dozen services they promise to deliver. Listing agents, for example, promise they will deliver a competitive or comparative market analysis (CMA) to help clients price their home, and buyer’s agents promise to do the same before helping their clients make an offer.
Agents also promise to contact their clients after they close “to assure the satisfactory completion of all service details,” and offer them the opportunity to evaluate the service they received.
As a result, Romito said, agents working with QSC earn higher marks for customer satisfaction than Realtors as a whole. While 55 percent of sellers polled by NAR in a 2008 survey described themselves as “very satisfied,” with their Realtor, 83 percent of sellers polled by QSC said the same about their agent.
The percentage of “somewhat dissatisfied” or “very dissatisfied” buyers was also much lower — 3.1 percent for buyers polled by QSC vs. 14 percent of those polled by NAR.
Surveys show that only one in five sellers are ever contacted by their agent after closing, Romito said. Three out of four buyers don’t hear from their agent after closing, either. But more than 80 percent of sellers represented by agents working with QSC are contacted after closing, he said, and more than 90 percent of buyers.
All agents working with QSC have three options regarding the public display of survey results:
- Withold them from the public;
- Disclose only their customer satisfaction rating, a numeric score of one to five based on a minimum of four surveys;
- Disclose their customer satisfaction rating, and provide detailed survey results in the form of pie charts and graphs.
If agents opt in, the information is published on QSC’s consumer-facing site and can also be displayed or linked to from multiple listing service, broker or agent website using a widget.
“Most of the fear regarding the so-called ‘bad client’ is what I call ‘fear of the dark and ghosts and goblins,’ ” Romito said. “Once people get into the results, and see the process, almost without exception people get more comfortable.”
Although QSC rarely invalidates a survey, it has done so in cases where an agent and their manager can prove they have a factual basis for dispute.
Romito said a survey was once tossed when it was determined that it had been filled out by a teenage boy as a lark. In another case, a female agent’s claim that she had been sexually harassed by a male client who later submitted a negative review was upheld and the survey invalidated, he said.
Value to consumers
While some agents may worry they will be portrayed unfairly online, consumers may not trust a rating system that produces only positive reviews.
Jonathan Cardella, the CEO of online brokerage and property search site NeighborCity.com, said he is “very skeptical of any user ratings when it comes to real estate agents.”
For one thing, Cardella said, if an agent receives a good rating or ratings from clients interested in a specific property type in a particular market — Tribeca lofts, for example — that doesn’t mean they’ll be the right agent for a consumer looking for starter homes on the Upper West Side.
In Cardella’s view, “the only way you can really find out if an agent is good or not is to take their completed and incomplete transactions for the past few years and compare the results against their peers to empirically determine how they rank against a market baseline.”
NeighborCity uses transaction data from local MLSs and users’ property-search criteria to generate an “AgentMatch” score that is intended to help consumers find the agent with the most expertise in their particular market, property type, and price range.
Cardella questioned whether the agent ratings that Zillow, for example, has aggregated in the last several months are of much use to consumers, since the vast majority of agents seem to be getting only stellar reviews.
In the Denver market, Cardella noted that 190 out of 199 agents reviewed at Zillow had never received anything less than a five-star rating. Six others had averages of 4.7 or better, while three agents had each received a single, one-star review. Cardella said he saw similar results in all of the markets he looked at on the Zillow.com site, including San Diego and Utah.
Cardella said in an e-mail that the ratings at that site appear to him to be “an exercise in SEO (search engine optimization) and (to) curry favor with their advertisers, not a tool meant to help consumers pick a real estate agent.”
A Zillow spokeswoman, meanwhile, said reviews of local agents are “an incredibly useful tool for consumers,” and that the open-ended written comments submitted are “just as important, if not moreso” than numeric ratings.
The written comments “help consumers better understand the experience others had working with a particular agent and where the agents strengths and weaknesses lay,” Zillow spokeswoman Whitney Tyner said in an e-mail message.
Given that National Association of Realtors surveys show 87 percent of consumers would recommend or use their agent again, it’s not surprising that so many of the more than 25,000 reviews Zillow has published have been positive, Tyner said.
The feature is also relatively new, and “as more consumers discover this feature, we expect more diverse reviews and ratings to come in over time,” Tyner said.
When Zillow launched agent reviews in December, it encouraged agents to invite their past clients to submit reviews. But any consumer who has created a Zillow profile can review an agent they’ve worked with directly.
In January, Zillow made the agent reviews more “discoverable,” enabling consumers to search for local agents and compare ratings and reviews. Reviews are now accessible wherever consumers interact with agents, such as with for-sale listings, and at the “Zillow Advice” Q-and-A forum.
Although agents have the ability to publicly respond to all reviews, Zillow will not remove reviews that “are based on legitimate experiences,” Tyner said (in February, Zillow also began allowing renters and landlords to review agents they’ve worked with).
Agents with five or more reviews have seen customer contacts increase by 134 percent, on average, she said.
Zillow and QSC each declined to provide the average customer satisfaction rating for agents they’ve collected reviews on.
Romito said QSC’s surveys are “consumer-centric” — focusing on the client’s assessment of service — and that the company is unique in employing an invitation-only, “closed system” to insure a representative sample of legitimate responses is collected.