J.D. Power: More buyers and sellers opting out of agents

By Day Marketing

Home buyers and sellers have been increasingly likely to bypass real estate agents in their transactions in recent years, according to an analysis by J.D. Power.

In its Home Buyer/Seller Satisfaction Study, now in its 11th year, J.D. Power found that 19 percent of repeat buyers were purchasing a home without an agent. Fourteen percent of repeat sellers, 13 percent of first-time buyers, and 9 percent of first-time sellers also decided to buy or sell a home without a professional.

Those who buy or sell a home on their own can avoid paying a commission to a real estate agent. However, these professionals typically warn that doing so carries greater risks, such as overpaying for a property or failing to market a home properly. While the majority of buyers continued to rely on professionals, 88 percent said they started looking at properties before they chose an agent.

“Real estate firms are recognizing that their value proposition has shifted from that of information broker to trusted advisor; as a result, we’re seeing increases in customer satisfaction in each of the segments of home buyers and sellers,” said Craig Martin, senior director of financial services at J.D. Power. “The challenge for these companies is to consistently demonstrate and communicate the value to current and potential customers. Those who ensure trust and understanding are at the center of their client and customer strategies will truly differentiate from both traditional competition and those attempting to disrupt the industry.”

The study measures buyer and seller satisfaction based on their experiences with agents, real estate companies, the closing process, real estate marketing, and additional services. Satisfaction scores are based on a 1,000-point scale.

On average, first-time sellers had a satisfaction score of 872, followed by scores of 871 among first-time buyers and 868 among repeat buyers.

First-timers typically relied on a firm’s reputation, with 44 percent of sellers and 39 percent of buyers saying this was the main reason for choosing a real estate company. Repeat buyers and sellers were more likely to rate their experience with a company’s agents as their top reason for choosing the firm.

Responsive agents resulted in a roughly 100-point boost in satisfaction scores among buyers and sellers. The study said timely responses to a client’s questions, sharing comparable properties, and keeping customers informed of their transaction’s process all helped improve satisfaction.

Those who reported higher levels of satisfaction were more likely to say they would use the firm again and refer it to others. J.D. Power determined that more than half of the recommendations a customer made resulted in new business for a firm.

Social media played a prominent role in the process, with 55 percent of sellers and 47 percent of buyers saying they used it to find an agent. The majority of both buyers and sellers reported satisfaction scores above 900 when using social media. Some buyers, especially first-timers, also said they used social media to find a home to purchase.

Century 21 had the highest ranking among first-time buyers for the fifth consecutive year, earning a satisfaction score of 883. RE/MAX was the second highest ranked firm at 871.

Among repeat buyers, Berkshire Hathaway HomeServices and Coldwell Banker tied for the top sport at 874. Keller Williams followed close behind at 870.

Century 21 also ranked highest among first-time sellers with a satisfaction score of 891, again for the fifth year in a row. Following were Keller Williams with a score of 857 and Coldwell Banker with a score of 856.

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