Rating real-estate agents has its place
Rise of online systems has local industry eyeing survey-based effort, but manipulation feared
From mortgage rates to market trends, almost every aspect of homebuying can be measured.
Except for one of the most important: the real-estate agent.
That’s changing, though, as a growing number of organizations and companies attempt to rate the performance of real-estate agents.
Driven by the presence of online rating systems, Real Living HER is testing a system, and the Columbus Board of Realtors is considering getting into the game.
“These ratings are already out there, and our thoughts were, ‘Hey, if we’re going to be rated, let’s make sure it’s a fair and equal system, and maybe we should do it ourselves or hire a company to do that,” said Chris Pedon, president-elect of the Columbus Board of Realtors.
Real Living and the Columbus Board of Realtors are looking at a system based on surveys from buyers or sellers.
About 60 Real Living HER agents are part of a test version of the system, in which an outside company collects survey data. Agents can opt in or out, but once in, they can’t pick and choose results.
“I want to hear from customers,” said Chris Derrow, president of Real Living Inc., the managing partner of Real Living HER. “Were they happy with us?”
The effort is partly in response to websites such as Zillow, Yelp or Angie’s List, which allow users to rate and comment on real-estate agents. Agents contend that most such sites are subjective, anonymous and easily abused.
“You can pay companies to make you look great on these sites … and make competitors look bad,” said Gerry O’Neil, a partner in C.R. O’Neil and Co. who is encouraging the local board to adopt a rating system. “It’s morally reprehensible; it’s the wild, wild West.”
One site, NeighborCity, tries a different approach: The site claims to be the first national effort to statistically measure agents’ performance. It looks at several statistics, including number of listings, percentage of listings that result in sales, percentage of asking price received, average price per square foot and number of days on the market before sale.
The site’s AgentMatch feature combines such data into a “secret sauce” to arrive at a ranking from 0 to 100 for each agent, said Jonathan Cardella, chief executive officer of the San Francisco-based site.
The site ranks about 1,500 of central Ohio’s 5,000 real-estate agents.
Cardella maintains that real-estate agents should be evaluated by an outside service instead of agents themselves.
“They’re inherently biased,” he said. “They want to head it off and control it so someone like us doesn’t do what we’re doing.”
In fact, NeighborCity has been accused of copyright violations by Multiple Listing Services (real-estate agents’ data arm) in Minnesota and Maryland.
In addition to the legal challenge, real-estate agents contend that sites such as NeighborCity involve their own conflicts because they are typically paid by agents who receive leads from the sites.
Agents also note a number of pitfalls to measuring performance statistically.
For starters, data from the MLS can easily be manipulated. An agent can drop the price on a listing, for example, making it look as if the home sold for much closer to the asking price than it did.
Or an agent can take a home off the market and place it back on, to make it appear as if the home sold more quickly.
Or transactions can be credited to a team leader, not the individual agent.In addition, some statistics, such as number of listings, can carry different interpretations: Although a high number of listings suggests experience, it also might suggest an agent who devotes minimal time to each listing.
“I think the quantitative approach they’re taking is at best misleading,” Derrow said. “You’re feeding the beast, the agent who knows how to work the system.”
Derrow expects that once the test of the local system is complete, the service will be offered to all Real Living agents, who would have the option of publicizing their results.
The Columbus Board of Realtors has looked at similar rating systems used by Realtor organizations in Peoria, Ill., and Houston.
Agents say they like the idea of rating agents, even though they know it’s a tricky business.
“I think everyone should be accountable,” said Jo-Anne LaBuda, a Keller Williams Capital Partners agent in Worthington. “I think it’s a great idea.”
Still, LaBuda and others say it’s difficult to judge something that often boils down to a personal connection between agent and client.
“It’s like a job interview,” said Board of Realtors President Jim Coridan. “I don’t think there’s anything better than an honest reference.”