Washington, D.C. – A new Consumer Federation of America (CFA) report compares information about individual real estate agents provided by widely used online information sources – Zillow, Realtor.com, HomeLight, Yelp, Facebook, and the websites of the agents themselves. The report – Choosing a Real Estate Agent: An Evaluation of Information Sources About Quality of Service – concludes that Zillow agent profiles represent the most useful source of information. Zillow profiles cover a large majority of active agents and include current listings, past sales and their price history, customer reviews, and other information for most of these agents.
“A home represents the most expensive purchase consumers will ever make,” said Stephen Brobeck, a CFA senior fellow. “Consumer selection of an agent strongly influences whether they receive good value from the sale. Zillow agent profiles represent a valuable source of information for making this choice,” he added.
The report documents the facts that some 90 percent of home buyers and sellers use an agent yet a large majority of these consumers undertake limited searches, often contacting only one agent. This search, according to the report, should focus special attention on an agent’s past sales and customer reviews. Suggestions from friends and associates can be helpful but usually reflect experience with only one or two agents.
As the table below shows, Zillow was most likely to provide information for a representative sample of active agents from 30 cities. In addition, the Zillow agent listings were more likely to include a large number of reviews.
Table 1: Probability of Providing Information about Past Sales and Customer Reviews
The research also found that all Zillow agent listings, but only a small percentage of agent websites, included key information about date and party represented for past sales. Without dates, it is difficult to determine whether the agent had recent clients.
Further, the research concluded that the quality of customer reviews in the Zillow agent profiles is better than that in the reviews on agent websites. Zillow vets and includes all legitimate reviews that are submitted by consumers whereas agents have the option of including only the most favorable reviews. Furthermore, as the report explains, it is more likely that agent websites contain fake reviews from friends, colleagues, or the agents themselves.
“Customer reviews on Zillow are not an unbiased source because almost all are generated by agents who contact past clients,” said CFA’s Brobeck. “However, Zillow reviews contain information useful for consumers and are less biased than those on agent websites,” he added.
Consumers Should Be Skeptical of Overall Ratings of Agents
Zillow, Realtor.com, Yelp, and Facebook provide overall customer ratings for many agents on a scale of one to five with five as the top rating. The report shows, however, that a large majority of a representative sample of active agents receive a five rating by each company.
Table 2: Agents Rated Five Among Those With Ratings
Nearly all agents received a rating of at least 4.0. For example, of the Zillow agents rated, 92 percent received a rating of at least 4.8.
“Consumers will learn far more about agents if they read all the customer reviews than if they rely on overall ratings,” noted CFA’s Brobeck.
How Zillow Agent Profiles Can Be Helpful to Consumers
Zillow agent profiles contain information that help home buyers and sellers learn more about the experience, competence, and service provided by individual agents. This information can be accessed on the Zillow website under “agent profiles” found in the navigation bar at the top of the home page.
- Past sales, especially recent ones, and current listings reveal the level of agent activity. They are good indicators of whether an agent is a full-time professional with much experience.
- Past sales also reveal whether an agent typically represented one side in a home sale, the price range of these sales, and the geographical area in which the agent worked.
- The price history of properties sold by an agent often provides information about how long it took the agent to sell properties and whether prices were marked up or down.
- Detailed customer reviews of a client’s experience with an agent supply valuable information about how the agent dealt with clients and other agents. These detailed, descriptive reviews are more useful than brief reviews full of enthusiasm and generalities but short on specifics.
Key Questions to Ask a Real Estate Agent
After researching real estate agents using Zillow agent profiles, home buyers and sellers can learn more by interviewing several agents. Here are key questions that can provide useful information about each agent.
- Representation: Will you represent my fiduciary interests throughout the sale? Some agents may agree to fiduciary representation initially but then later ask to switch to dual agency or transactional brokerage because they also want to work with the other party.
- Delegation: Will the agent work with the consumer or delegate much work to other people in their firm?
- Length of Contract: While this is a complex issue, we strongly caution against signing an exclusive agreement for more than six months.
Sellers should also ask questions about:
- Recommended sale price: If this price is much higher or lower than those of similar properties, one should ask for an explanation.
- Recommended property improvements: What improvements would the agent recommend and why? Look for recommendations that reflect good knowledge of the property.
- Recommended marketing: Most importantly, will the property be immediately placed on the local Multiple Listing Service (MLS). Agents have a financial incentive to delay this listing and search for a buyer among their clients or clients of their firm, raising conflict of interest issues.
- Commission: Despite the uniformity of commissions (as revealed by much research including CFA’s), sellers may be able to negotiate a lower rate, especially if the sale price is high, they are selling and buying different properties with the same agent, or their agent also recruits and works with the buyer. It is important, though, that any rate reduction come from the listing agent’s split, not that of buyer agents who then may have less incentive to show the property.
Buyers should also ask: Will you show me properties that you and your firm have not listed? Agents with listings have an obligation to sell these properties, and their firms encourage and sometimes incentivize agents to sell the firm’s listings. Promoting these listings limits buyer access to all homes for sale and creates conflicts of interest that could lead to a higher sale price.