There’s lots of good information on real estate websites, but ratings of individual agents probably aren’t worth much.
According to the latest report from the Consumer Federation of America, you should approach such ratings with a healthy sense of skepticism.
“Consumers will learn far more about agents if they read all the customer reviews,” said the study’s author, Stephen Brobeck – the key word being “all.”
Many, or even most, of the reviews on a given site might be positive. You’ll have to read every last one of them to find out if a previous client had problems or issues you should be concerned about.
“There has to be a critical comment in there somewhere,” said Brobeck, who headed the CFA before relinquishing that post to become a senior fellow. “So read all the reviews carefully and look for details.”
Even at that, though, you may not get the full picture of an agent’s prowess.
Most reviews are accurate, at least on Zillow’s website, Brobeck’s study found. The site vets all legitimate reviews that are submitted, and agents are not permitted to remove the negative ones.
However, on the other sites studied – Realtor.com, HomeLight, Yelp and Facebook – the agent has the option of including only favorable reviews, according to the report. And as this column pointed out in early January, sites operated by agents often include fake reviews from friends, colleagues or the agents themselves.
Customer ratings can be even more bogus, according to the study. Ratings are usually on a scale of 1 to 5, but nearly all of the hundreds of agents studied by the CFA were rated at 4.0 or better, with “a large majority” of the sample receiving a 5.0.
It’s strange, indeed, that there’s not an average agent in the bunch.
The study found numerous cases in which agents with “very few and sometimes only one customer comment” were anointed with a 5.0 rating. A “significant minority” with a 5.0 rating had three or fewer customers.
“The ratings are not that helpful,” Brobeck told me. “They are inflated and do not provide a reliable basis for comparing agents.”
The new report is the fourth in a series on real estate from the CFA. Two of the previous studies dealt with issues concerning agent representation, and the third covered the commissions agents and their brokers charge.
Nine in 10 buyers and sellers use an agent, yet most of them undertake limited searches before hiring one, if they search at all. According to research from the National Association of Realtors, 75 percent of buyers and sellers interview just one agent.
But, as the CFA report points out, “there can be a huge gulf between the quality of services offered by different agents.” And they usually charge the same, whether they’re experienced or not. That alone is reason enough for buyers and sellers to do their homework.
Unfortunately, most people go with the first agent they speak to, without looking into past sales, when those sales were completed and whom the agent represented – the buyer or seller. Without that information, Brobeck said, it is difficult to determine whether the agent has had recent clients.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at firstname.lastname@example.org.