One emerging trend these days includes Agent Rankings. I began seeing this about two years ago as various sites began to emulate the Ebay style 5 star rating system. I am a bit of an analytical person so at first I thought this was a great tool for consumers. After reviewing several different websites methodology and watching how other peers are “rated”, I am not so sure.
It has been nearly 30 years since I took a statistics class at Boise State University, but I believe the following factors are still valid considerations.
Sample Selection: You can really skew the results by either purposefully or inadvertently choosing the wrong samples. How can this be done effectively if an agent is allowed to only target their positive results?
Sample sizes: The larger the sample the less the margin of error. The larger the sample size, the less impact one or two extreme ratings will skew the data. A lot of times, you throw out the extremes and concentrate on the “average”. If you compared two agents both of which had a 5 star rating, would you think they are equal if one had 20 ratings with 5 stars verses an agent with a single 5 star rating?
Purity of Sample: Who is allowed to rate the agent? I have seen some sites in which family members have rated them, competitors give negative rankings, they rate themselves, etc.
Quantity verves quality: The National Association of Realtors claims that seven percent of the Realtors did 93% of the business in 2009. (not the traditional 80/20 rule). There is ongoing debate whether it is better to use an agent that is the busiest since there might be a reason they are so busy and there is also the consideration that they may be too busy. Remember when Avis made that the premise of their advertising campaign years ago “We are #2 – we try harder!”? The Houston Association of Realtors (HAR) was using a system called Agent Match to help consumers team up with Realtors but discontinued the service when some agents claimed it gave an unfair advantage to those that were established. I got mostly out of personal sales for a few years as I was managing and growing another company so my sales for 2006-2008 are not very impressive when compared to agents that were writing a lot of contracts back then. I still don't write a lot because I am the owner / manager / broker of my company - how do I reflect that in my totals?
Standardized units of measure: There is no standardized definition of a five star Realtor. Should I get four or five stars if I don't create a bidding war to bid up the sales price for a seller? If I sell the first home I show a potential buyer, did I do a perfect 5 star job or should I get a 3 star since I may not have shown them enough choices?
Realtors offer so many different services, that you need to be very specific about which part of your service is being ranked. Is it your negotiation skills, communication skills, advertizing/marketing campaign, ability to meet expectations (sometimes of unrealistic clients), pricing strategy, availability, overall knowledge of the transaction, quality of affiliates they recommended, organizational skills, etc. If the Realtor did everything the way they should and the interest rates went up before the buyers locked which kept them from qualifying, I don’t perceive that as being the Realtor’s fault, but would the consumer be so forgiving when it came time to rate them?
Assuming a Realtor elects to go forward with this rating concept, where do they go to start since there is no central standardized rating service for Realtors? Some public portals require the Realtor initiate the process and provide a rating request generated by the site to go directly to the client. I am not sure my client would like me to give out their private email address to sites that generate their revenue via marketing and advertising revenue. How many different rating services and which ones should be selected?
Feedback: Is it possible for an agent to comment about a specific ranking? For example, if a seller ranked you poorly just because they sold their home at a loss due to the economy and doing a short sale, shouldn't you be able to cite that in a feedback remark? This is kind of like going to court and claiming “Guilty with an explanation your honor”.
What are your thoughts on Agent Ranking services?
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