One platform came out way ahead of the competition
Not all online platforms are created equal when it comes to providing trustworthy, relevant information about the nation’s real estate agents. According to new research by the Consumer Federation of America, which compared the usefulness of information about individual real estate agents on Zillow, Realtor.com, HomeLight, Yelp, Facebook, and the websites of agents themselves, only one provides consistently robust appraisals of agent performance: Zillow.
“Consumer selection of an agent strongly influences whether they receive good value from the sale,” said Stephen Brobeck, senior fellow at CFA and author of Choosing a Real Estate Agent: An Evaluation of Information Sources About Quality of Service. “Zillow agent profiles represent a valuable source of information for making this choice.”
Knowing where the most accurate agent information can be accessed is of extreme value to home buyers, especially at a time when consumers are spending so little time determining which agents to work with. The report details the findings of a 2018 NAR survey, which found that 75 percent of buyers “interviewed” only one agent, while 75 percent of sellers “contacted” only one agent. A shocking 69 percent of first-time buyers interviewed one agent, while 80 percent of sellers hired one of the first two agents they met with.
Brobeck’s research has found that most of the agent information available to consumers is severely lacking in depth. If that assertion is true, what have these people been basing their choice of Realtor on?
“One significant finding of this study is that a large majority of agents and their firms do not provide important information about agent experience, success, and consumer satisfaction,” he writes. “Another finding is that, while third parties such as Zillow and Realtor.com include these types of information, the quantity and quality of the information in these sources varies considerably.”
Where is Zillow getting it right?
The report examines two key areas where the platforms studied differ: the information provided about past sales and customer reviews.
Only three platforms’ profiles, Zillow, Realtor.com and HomeLight’s, supply information about an agent’s past sales. That data appears on 77 percent of Zillow’s profiles, 55 percent of Realtor.com’s, and only 33 percent of HomeLight’s. Only Zillow and Realtor.com provide information about price history, including list prices, delists/markdowns/mark-ups, and final sale price. Because Realtor.com doesn’t regularly identify whether an agent worked with a seller or buyer on each transaction, “its information about price history is generally less useful than that of Zillow”, the report states.
The report found that agents’ websites are also lacking specific information about their past transactions. Of the 600 websites studied, only 30 percent provide specific information about past sales, with property address and sale price being the headline numbers. Only seven percent of these agents provide dates of sale or whether they represented the buyer or seller.
Zillow was also miles ahead of its competitors in terms of providing customer reviews as part of its agent profiles. While even the 61 percent of Zillow profiles that include reviews seems low, it’s more than double the percentage of almost every other platform. Facebook, where thirty-eight percent of agent profiles share customer reviews, came in second, followed by Yelp (26 percent), Realtor.com (25 percent), and HomeLight (12 percent).
Only 49 percent of the agent websites studied provide at least one review. Of that number, 13 percent share three reviews or fewer, making them borderline worthless.
The reviews that are out there need to be taken with a grain of salt, Brobeck says. Today, five-star reviews are more the rule than the exception, a fact that does not track with recent NAR survey data that says 25 percent of buyers and 52 percent of sellers were less than satisfied with their recent transactions. On Yelp, Zillow, Realtor.com and Facebook, five-star reviews account for at least 70 percent of those posted.
“It seems unlikely that nearly all of those who did not rate their agent or the selling process highly would give their agent a 4.8 rating or above, as did 92 percent of those providing Zillow reviews in our sample,” Brobeck writes in the report.
Part of the problem, and something prospective buyers need to realize, is that most of the reviews an agent’s ratings are based on were solicited by the agents themselves from clients they assume will give them high ratings. Agents with a handful of favorable reviews can also find their overall rating much higher than those belonging to busier agents who may have received dozens of 4.8s or 4.9s over the course of their career. On Facebook, 39 percent of 5.0 agent ratings were based on three reviews or less. For Yelp, it was 46 percent; for Realtor.com, 36 percent. Only 11 percent of Zillow agents with a 5.0 rating had three or fewer customer reviews.
“Consumers looking at reviews of an agent should particularly note whether the reviews mention the agent by name,” the report explains. “For some agents, the listing of reviews includes those for all agents in the firm. When the agent is the senior and managing broker, these reviews can be informative. Yet, when the agent is only a sales representative, the reviews reveal more about the firm than the agent.”
Because it removes agents from the review collecting process, Zillow’s reviews are considered by the report to be the most trustworthy. Reviewers must register with Zillow prior to leaving reviews and are asked to provide information about the sale of their properties that will then be confirmed. Zillow is also vigilant about removing reviews that appear suspicious or involve conflicts of interest, like reviews from family members or work colleagues.
The report shares an illuminating example in which it compares the reviews received by a Seattle agent on the agent’s own site and on Zillow. On Zillow, the almost 100 reviews displayed differences in length, content and level of criticism. The agent’s website, on the other hand, included only 39 customer reviews. These were shorter, contained no criticism, and were loaded with suspiciously similar phrasing: “The first words in these reviews, often their own sentence, included ‘excellent’ (8 times), ‘exemplary’ (2 times), ‘top notch’ (2 times), ‘exceptional,’ ‘incredible,’ ‘superb,’ ‘outstanding,’ and ‘fabulous’,” says the report.
“Consumers should be aware that almost all online reviews are generated by the agents themselves, who encourage former clients to write them,” Brobeck said in an email to Mortgage Professional America. “Despite this bias, a large number of detailed reviews provide much insight into how an agent works with their customers.”
The key word is “detailed”. For consumers to make a fully informed decision on which Realtor to partner with, they should be urged by their lenders and originators to pepper prospective agents with elaborate questions that can help determine:
- How long an agent takes to sell properties
- The price range of an agent’s sales
- How how much hands-on service will be provided versus the level of delegation
- Why an agent has decided on a particular asking price
- How a property will be marketed
Anyone who has ever choked down a bad meal at a restaurant with a 4.8 Google rating has learned the hard way that a business’s online reviews should never be taken as gospel. When it comes to buying a home, as proven by the CBA’s valuable research, those reviews should probably be given even less credence.
Just because a real estate agent has a five-star rating doesn’t mean he’s a five-star Realtor. That’s a two-minute lesson lenders and originators should force all of their clients to sit through.
