Declining customer satisfaction a threat to repeat business
J.D. Power survey shows managing buyers', sellers' expectations is key
By Inman News, Tuesday, August 21, 2012.
Survey image via Shutterstock.With customer satisfaction among buyers and sellers alike slipping, real estate brokerages that want to win repeat business must keep their clients better informed, educating them on comparable sales information and following up with them after closings, J.D. Power and Associates said in releasing the results of its 2012 Home Buyer/Seller Satisfaction Study.
The study found homebuyer satisfaction -- determined by consumer ratings of the agent or salesperson they worked with, their brokerage office, and the variety of additional services offered -- at an all-time low. At 789 on a 1,000-point scale, overall satisfaction among homebuyers was down from 797 in 2011 to a new low in the five-year history of the survey.
Customer satisfaction among sellers -- determined by consumer ratings of the same factors evaluated by buyers, plus the marketing of their property -- also declined, averaging 768, down from 779 a year ago.
A key reason that satisfaction is down among both groups is that customer expectations are not being met, said Christina Cooley, senior manager of the real estate practice at J.D. Power and Associates, in a statement. Sellers, for example, are not happy at having to compromise on their listing price, she said, while buyers are having to settle for homes that are smaller or not in the condition they'd hoped for.
The survey showed that real estate companies scoring highest in customer satisfaction were more consistent at capturing a greater proportion of the listing price. On average, sellers report receiving 89 percent of their listing price.
Real estate companies that work closely with customers to meet their needs may not only be able to manage their clients' expectations, but exceed them, Cooley said.
"At the end of the day, real estate companies may best satisfy their customers by keeping them informed, educating them on comparable sales information and following up with them after the closing," Cooley said.
Among sellers, brokerages affiliated with two of five major real estate brands evaluated scored above average, J.D. Power said. Brokerages affiliated with Keller Williams scored an average of 800 points with sellers, well above the overall average of 768. Brokerages affiliated with Coldwell Banker also scored above average, with an average score of 772. Brokerages affiliated with Prudential Real Estate earned an average score of 766, followed by Re/Max (760) and Century 21 (751).
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Among buyers, brokerages affiliated with Keller Williams had the highest average score -- 818 -- followed by companies affiliated with Prudential Real Estate (803) and Coldwell Banker (791). Brokerages affiliated with Re/Max earned below-average scores of 788 from buyers, and Century 21 affiliates finished last among buyers with an average score of 764.
Right-click chart to enlarge.
Higher levels of customer satisfaction translate into customer loyalty, J.D. Power said, noting that while the agent or salesperson has the largest impact on overall customer satisfaction among both homebuyers and sellers, less than 20 percent of customers say they "definitely will" switch real estate companies if their agent moves to another company.
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Submitted by Ruthmarie Hicks on August 21, 2012 - 10:11pm.
There are several problems here:
Buyers that expected to be able to snap up a luxury home for peanuts after the housing crash will never be satisfied. The same holds for sellers who still think its 2006. Many of the buyers I have dealt with recently also have had very unrealistic expectations of what an agent can do for them. They seem to think that I can give them prime showing time every weekend for the next six months as they stampede over the entire county and beyond for the perfect home. This is just not realistic. We are agents not tour guides. They need to get serious and dig in and research things that we can't discuss such as crime and schools. They can eliminate swaths of properties that way. If they refuse to do the due diligence, I suggest that they go work with someone else because they probably aren't buying anything.
The other problem that plagues both buyers and sellers is that they think we can influence the market. We can't and any agent that says "I can get your MORE" is lying!
Meanwhile we've got agents crawling all over each other for a smaller and smaller slice of the pie and an industry that refuses to self-police. It encourages tactics that are misleading to the consumer and create a situation where the buyer or seller expects far more from the agent that they can ever deliver. Yet, if you tell the prospect the truth of what can and can not be done upfront - they often run in the opposite direction into the arms of an agent that over promises and under delivers.