The Greater Milwaukee Association of REALTORS® conducted a focus group of consumers recently to solicit feedback on the performance of Wisconsin REALTOR® brokers and agents, and gather suggestions for how to improve the quality of service that REALTORS® provide in the future. Most of the buyers who participated in the focus group were first-time buyers.
Industry consultant Jerry Matthews conducted the focus group and wrote the final report on which this article is based.
Involvement in the transaction
The focus group participants said the “fun” part of the home buying process was definitely the search. Consumers felt that they were in control of the entire process at that point and had total flexibility and access to virtually any information they wanted. The sellers were able to extract fairly sophisticated information from the websites they visited, even constructing their own version of a Comparable Market Analysis (CMA). One participant used easily available market comparables and statistics to qualify their agent.
Another favorite aspect of the transaction was the ability to handle all of the details electronically. Communications were easier using various electronic tools, but the most distinct advantage was the transaction process itself. The movement of forms, offers and documents, all electronically, was much easier, more convenient, and validated delivery and receipt.
The most negative comments revolved around other REALTORS® in the transaction. Cooperating agents mishandled many of the process items, like supplying information on time, demanded changes in showing times or dealt with last-minute paperwork delays, to name a few downsides.
REALTOR® professionalism
There were also comments about the “lack of professionalism” on the part of cooperating REALTORS® This had to do with attitude, appearance, comments and other items that were attributed to someone who was not a professional. One buyer noted that during his search, he decided that a property did not meet his expectations, and the listing agent verbally reprimanded him for not being serious. There were also comments in the focus group about the lack of availability of the cooperating agent for days at a time or over the course of a long week.
To the consumers, professionalism consisted of proper handling of changing situations, attitudes and overall knowledge. When pressed as to whether a lack of professionalism was a result of working part-time in the business or full-time, the consumers quickly confirmed that all of the agents that displayed this propensity were described as full-time REALTORS®.
All of the focus group participants agreed that the very beginning of the relationship should contain an agreement as to the frequency and the methods of REALTOR® client communications. The consumers noted that they did not like clarifying processes during the transaction — they want to know if they will be working with the agent throughout the transaction or a team member, and stated that this should be clarified that in the very beginning of the relationship.
REALTOR® experience and knowledge
The focus group participants felt that the most valuable information provided by an agent was based on knowledge and experience. As an example, one participant noted that their agent recommended that an engineer be engaged to study the structural integrity of a property that appeared to be quite different from others in the neighborhood. The REALTORS® knowledge of other properties, the age of the neighborhood and the common structures in the area were crucial to seeing that structural difficulties were likely. The buyer was very appreciative of this and, even though he was a seasoned buyer, would not have known of that possibility.
When making a decision on a property, the ability of an agent to bring experience to determine what issues were of significance and which were not was quite crucial to the consumers. This expertise was beyond numbers or pictures or facts — but instead was based purely on experience and industry knowledge.
Knowledge of the most critical points in the transaction was also an important component of a good agent. The timing on a price change, the shift of financing possibilities, the awareness of a change in the attitude of the other side of the transaction, deep knowledge of a community or a specific area, or even coming across a “stumbling block” in the process, all were areas that agents’ expertise became a very valuable asset to the buyer or seller.
So, the most valuable service an agent provided was not the ability to provide facts, figures or pictures; the most valuable service was the abundance of industry opinions, experience and wise counsel on critical decisions in the process. While finding information on the Internet to establish a going price for a particular property in a neighborhood is fairly easy, the real question is whether or not that price represents true value going forward based on the future prospects of the neighborhood. In this case, the REALTOR® becomes a consultant on the prudence of the investment.
Marketing vs. referrals
All focus group participants began their property search on the Internet months before contacting an agent. The power of search engines and various websites dedicated to real estate information raised the question of “why do I need a REALTOR®?” among the group.
Once they secured an agent, however, consumers were quite appreciative of the MLS portal access given to them. Consumers noted that after having access to the MLS portal, they rarely went back to other websites for additional information.
The determining factor in selecting an agent was not through advertising and marketing efforts by real estate firms and agents, although the focus group participants noted that these marketing efforts did raise awareness. All of the agent selections were based on referrals. Most notably, the referral was from a friend or close associate whose opinion was trusted.
Several consumers revealed that after receiving personal recommendations for a particular agent, they went online to then validate the experience or credentials of the agent on their personal website. The personal trust in a friend or associate trumps any other method described.
All of the consumers said that they would use a real estate agent in their next home buying or selling experience. They clarified that they would do so only if the knowledge and expertise was necessary, as property information was already easily available.
What clients would like to see
When asked about what agents can do to improve, participants said, “be real.” Agents need to know that clients can sense if they’re working in their best interest or not. Don’t waste clients’ time with useless activity or “overusing technology.” An agent should look at their career as a long-term profession and not a quick way to make money.
Some of the consumers observed that the world of the real estate professional is rapidly changing. They know the process is not one of finding the properties — they are already available freely on the Internet — but rather using the expertise, if needed, of a REALTOR® in a transaction.
A few consumers expressed their concern that the impact of the housing bubble will take a long time to unravel. They specifically were concerned about the appreciation of real estate going forward. So, agents should recognize this as a somewhat weaker argument for the purchase of real estate.
Regarding agent ratings, consumers did not think that a website that rated the performance of REALTORS® would be valuable to them. They know that agents, as well as agents’ friends and/or enemies, can manipulate rating sites, for good or evil. The consensus was that they would not trust the sites regardless of the degree of information presented. In fact, they were concerned that it would not be “fair” to the REALTOR®.
Mike Ruzicka is President of the Greater Milwaukee Association of REALTORS® (GMAR) and is responsible for managing the 5,000-member professional organization. Mike started with GMAR in 1996 serving as government affairs director and became president in 1999.