Rate your Real Estate Agent – “Completely unresponsive. Takes on way too many clients and has no time to complete simple tasks.”
— Reviews of real estate agents by buyers posted on homekey.ca.
While online reviews of everyone from mechanics to plumbers to doctors have long been available on the web, the lowdown on real estate agents and brokers has been mostly a mystery.
But several new web-based companies in Toronto hope to change that thinking.
The sites match agents to buyers and sellers. Potential customers send out details on what they are looking for in an agent. Agents then bid on the client, which could include sending in a marketing plan or how much they expect in commission. Consumers are then asked to review the agent once the transaction has been completed.
James Lau, a Canadian who spent eight years with Microsoft in Seattle, Wash., launched one of the Toronto sites this summer. HomeKey Inc. reviews agents using a five-star system, with one star meaning poor and five stars meaning excellent.
Lau got the idea from other websites, such as Amazon and eBay, where customers rate their purchase experience. Doing the same for real estate agents made sense, he said.
“I think there is a need to hold people accountable, especially since this is typically the biggest transaction that people will make in their lives.”
Lau said his research showed consumers were looking for realtor reviews but few websites provided that service because of the infrequency of real estate transactions, compared with travelling and dining out.
Another site, ibidbroker.com, launched last year by Ajay Jain, who hopes to change the way buyers ultimately pick their agents.
The marketing is always property-, not agent-focused,” said the Toronto-based Jain. “Consumers would look at the property they liked first, then call the agent. They didn’t necessarily look at whether the agent was any good or not.”
Jain believes the first website to develop a critical mass of reviews will likely dominate the market.
“If you can become the Tripadvisor of the real estate community it can be huge,” said Jain, whose website, like Lau’s, acts as a kind of dating service for the industry — matching consumers to agents.
Sites such as Tripadvisor and Expedia sell everything from flights to hotel rooms and cruises. But what drives traffic to the websites are the extensive reviews given freely by guests. Jain believes consumers would be more likely go to his site for the reviews of agents, and then use his service. While consumers don’t pay a fee to Jain, the agent pays to submit bids. The agent will more likely get the business if he is highly rated.
So far there has been some trepidation from agents who don’t want their name potentially tarnished online. But most agents are receptive, said Lau.
“The agents that give the best service have nothing to worry about — they know they’ll get great reviews,” said Lau.
Jain said agents in general have been “fearful” of negative responses.
“I think this is a positive in the long run because it weeds out the good agents from the bad,” he added.
Jennifer Yang said she was looking for an agent online but was surprised there was so little information out there.
“Everybody is No. 1, or they’re the best of the best, so it’s hard to differentiate who’s a good agent,” said the Toronto accountant. “It would be good to get some objective responses.”
Phil Soper, president and CEO of Royal LePage, said he is currently looking at a process to give agents feedback from customers through a review system in Canada. It would be the first for a major agency, he said.
“I think quality assessments on real estate professionals is an excellent idea,” said Soper.
Royal LePage’s U.S.-based sister company, Real Living, also owned by parent company Brookfield Asset Mangement, already does agent evaluations, said Soper.
Real Living, which merged with GMAC Real Estate, the real estate arm of General Motors, had a tradition of hiring a third-party evaluator to interview customers for feedback.
“This came out of the auto arm, where it was a habit for the companies to talk to customers to see how their salespeople did, and it’s a great idea,” said Soper, who was also the interim head of the company when it was first purchased in 2008.
“Sales is one measure of how well you’re doing, but we think we should go another step — how do you measure in client satisfaction?”
Soper said the website will help consumers choose the best in the business.
“Real estate agents in general are afraid of it, thinking they are putting themselves at the mercy of the market. But I think it will be a differentiator for full service agencies to see how we measure up.”
But Soper thinks evaluations by a third party are key, because it overrides any conflict of interest.
“If the website derives income from agents, then just follow the money and you will see that it is not in the interest of the website to provide negative reviews,” he said.
Lau, however, said he won’t back down, despite the fact his model is based on agents paying him a $180 fee for the referral.
“What’s the use of a review website if you only have positive reviews?” he said. “I think the review system is really important. Realtors will know their reputation is on the line.”
Like Jain, Lau believes the demand for information will eventually create a marketplace where good agents thrive and the consumer comes out ahead