Why Home Buyers Can't Evaluate Real Estate Agents
An interesting result from the good people at the National Association of Realtors from their survey of home buyers on what it is that consumers value in a Realtor: Honesty and integrity. Knowledge of purchase process. Responsiveness. And so on.
These all sound like wonderful things to want in the professional you're hiring to help you spend the most you've ever spent on anything, if you're in the 99.999 percent of the population who doesn't own a private jet.
But there are some odd things about this survey and its results.
Of the nine skills/qualities listed, over 79 percent rated eight of them as "Very Important," while only 40 percent rated tech skills as "Very Important." I find that bizarre. What's more bizarre, though, is that only 85 percent of respondents rated communication skills as Very Important.
Judging by these results, it seems to me that the survey question probably asked, "Rate the following skills and qualities of a real estate agent from Not Important to Very Important." Clearly, people weren't asked to rank these qualities in order of importance, as that would not result in four of the qualities scoring above 90 percent. So... who the hell are the 15 percent of communication skills were not very important? Are there that many people walking around saying, "Hey, it's okay if my agent mumbles on the phone and writes nonsensical emails"? According to the results above, one out of four single male buyers couldn't care less if their real estate agent has no people skills and has the manners of a Taliban enforcer attending a Women's Rights Rally. Really?
But there is a more fundamental problem, and one that actually impacts the consumer experience.
Assuming you do think things like honesty and integrity are Very Important to you... how exactly would you know if your agent has them?
It isn't as if people -- even if they're Realtors -- walk around with signs around their necks saying, "I'm not really honest all the time, and my integrity is somewhat shaky." Until you work with someone for a while, go through some ups and downs, and have reason to verify that the person is in fact honest and has integrity, how could you tell?
Professional services are full of these problems, which I call the "Great Lover" problem after an illustration by Marty Neumeier. Someone comes up to you and claims, "I'm a great lover." Is there some way of knowing whether he or she is right or wrong, short of going to bed and experiencing it for yourself? Lawyers say they're competent -- but short of having them handle a case for you, how could you tell? Doctors might tell you they have great judgment under pressure of a crisis in the operating room, but how would you know? References from past clients (or lovers) help, as does diplomas, degrees, credentials ("Black Belt Lover, Third Degree"), but all of those are substitutes for personal knowledge, which only comes from working with that professional.
For real estate transactions, the problem is compounded by lack of experience of the consumer. Most people buy or sell a house once every seven years on average. If you buy your first home at 30 (which is sort of on the early side), you're ready for retirement by the time you've had your fifth transaction. During that same period, you may have dealt with a doctor hundreds of times.
Consider some of these "Very Important" skills and qualities. "Knowledge of the purchase process" is one. If you've never bought a house before (as I strongly think would be the case for single men and women), how in the world are you going to be able to evaluate how much your real estate agent knows or doesn't know about the purchase process? Exactly what part of the process will you able to step in and say, "Hey, wait a minute - you're not doing that right"?
What about knowledge of the real estate market? If you, a random consumer, know more about the real estate market than your real estate agent who does this day in and day out, why on earth would you (a) hire her, and (b) not work as a real estate agent yourself? It's like my saying that a heart surgeon's "Knowledge of the cardiopulmonary system" is Very Important to me, except for the fact that I don't know jack about the cardiopulmonary system and would have to take whatever Doctor House has to tell me at face value.
This is the reason why I don't believe various consumer ratings of real estate agents have much value at all, even when it comes from past clients. They simply lack any basis to form judgments about the quality of service they received. Sure, they can tell me things about basic customer service issues, like Responsiveness or Communication Skills. But unless they've been actually ripped off, defrauded, or caught their agents in a baldfaced lie, they're going to assume that the agent was honest and had integrity. And unless they are real estate professionals themselves, there's no basis on which they can evaluate an agent's knowledge, negotiation skills, or transaction management skills.
In fact, something that experienced real estate agents talk about all the time is the fact that the opposite is more likely to be true: that consumers think the agent who put forth heroic efforts on their behalf is awesome, even though that heroic effort was necessary because the agent screwed something up badly, while smooth, trouble-free transactions make them think the agent was lazy or didn't negotiate hard enough, even though the reason why everything went so smoothly was due to the agent being a master at her craft.
So consumer reviews of real estate agents is not particularly meaningful. You know what would be meaningful though? Real estate agent reviews of other real estate agents. I, for one, would like to see what qualities and skills Realtors think are important, ranked in order of importance, and then see them rate each other on it after each transaction.
Of course, I would also like to have Steve Jobs leave his fortune to my favorite charity: The Rob Hahn Foundation for Education (Of Rob Hahn's Children)....
For more on real estate brokers and related topics see these AOL Real Estate guides:
- How to Choose a Realtor
- Top Questions to Ask a Real Estate Agent
- Terms Every Seller Should Know
- First-Time Homebuyer's Guide