The National Association of Realtors does an annual survey of home buyers and sellers that covers an extremely broad range of questions. One question in particular is whether or not home sellers would use the same real estate agent to sell their home in the future. The answers from the 2011 survey painted a pretty favorable picture, with 69% saying they definitely would and another 16% saying they probably would. But there’s a bit more to the story.
You see, there’s a better question to be asking. Recently the University of Central Florida’s Department of Psychology did a small survey of real estate agents and home sellers and one of the questions they asked home sellers was whether or not realtors do enough to justify the commissions they charge. 74% said they don’t.
This survey was done in conjunction with a software company that provides software for real estate agents to track what they do for clients and help them communicate with clients. So obviously they had an agenda: if you use our software you can justify your commission by tracking what you are doing and communicating that to your clients. They would like us to believe that the problem is lack of communication and I’m sure that’s part of it. But I don’t think that’s the whole story.
Could this be a reflection of that fact that a whole host of real estate agents simply don’t do their job – like return phone calls? Why wouldn’t a listing agent return the phone calls of a buyer’s agent inquiring about a $1 MM property? Or repeatedly turn down showing requests because they are too busy? I don’t get it. But you know what? For the most part home sellers aren’t even aware that this is going on. (I’d like to make them aware but I can’t really do that.) So this really doesn’t explain the negative perception of listing agents.
I think a big part of the problem is something that I have preached about endlessly. Home sellers typically don’t focus enough up front when selecting a listing agent on what that real estate agent is going to DO for them. Instead, according to that NAR survey of home buyers and sellers, they are focused primarily on things like the reputation of the agent (which is probably code for agent’s visibility) and whether or not the agent is perceived to be honest and trustworthy – neither of which is sufficient for making this selection. In fact, for 18% of home sellers, the most important factor was the fact that the agent was either a family member or a friend – the worst possible reason for selecting a listing agent a la My Cousin Vinny. Interestingly enough home sellers that chose a listing agent based upon personal ties like this were slightly more likely to only be interested in limited services – and probably got them.
What I am suggesting once again is that home sellers should focus on specific tasks that the listing agent is going to be performing for them and that includes getting detailed feedback on all showings and regularly updating the seller on what is going on with the listing and the showings. If home sellers did this and held their real estate agents accountable for delivering on their promises then I have little doubt they would conclude that the real estate agents earned their commission.
Caveat
I’m probably going to be contacted by the National Association of Realtors regarding my headline to this post. They don’t like it when people use the term realtor interchangeably with real estate agent because, technically, a Realtor is someone who is a member of the National Association of Realtors and abides by their code of ethics and not all real estate agents are necessarily Realtors. Never mind that 99%+ of all real estate agents are Realtors because they pretty much have to be in order to get access to the MLS (that might not be totally true but for all practical purposes it is). However, in this case I went ahead with the title because that’s how the survey question was worded. If the NAR has an issue with this they need to contact UCF.