Tuesday, May 26, 2009

Home buyers and sellers are customers, too......

Whether real estate related or not I regularly follow various marketing related sources and columns as much as possible. I found the recent story about the Yelp consumer review web site finally beginning to allow business owners to respond to bad reviews most interesting.

In this age of road rage, high unemployment, and consumers who carry a grudge no matter what the circumstances that a business which receives a complaint or critical review had not been able to present its side of the story until now. Speaking as a consumer, this move could “save” Yelp. From time to time I see consumer reviews of products and services, and reviews of matters such as hotel room stays and the like. As a consumer, I find it helpful if I see a possible negative from a customer of a product or service I am considering. But I can’t help but wonder about the other side to the story. The consumer that wrote a negative commentary about a business could have stiffed that same business previously, but we don’t know that without the business having equal time.

What does this have to do with real estate? Little to nothing at this time. The column I read about Yelp got me to thinking. I don’t know of any “review” source specific to real estate transactions. Yet, for the vast majority of us, real estate is the biggest transaction(s) we make in our lifetime.

As a consumer, I have a choice of hundreds of realty firms I could list or buy a property through. I also have the choice of using a “discount” brokerage, an “assisted sale” service, or selling it myself. This is a very important decision. Yet, I don’t have a web site or source to go to for reviews about real estate transactions. Does this make sense? I can read what others in my community think about the local hardware store or about last weekend’s new movies, but I don’t know if they had a good or bad experience with a local realty company when they bought their home?

Personally, I have heard stories from all sides. Over the past 20 years, I have worked with realty companies on radio, TV, newspaper, phone, and internet advertising and marketing. I have presented to entire offices, realty agent expos, and at seminars. But I have also represented FSBO companies and publications, including interaction with the public (buyers and sellers), even though I am not a licensed agent and had no direct involvement in the transaction. So I know there are 2 sides to every story, just as I know there a ton of stories out there that it would benefit all sides to be aware of.

These days, consumers don’t know who to trust when it comes to a real estate transaction. I see where there has been another set of state court rulings about realty companies tacking on an additional “administrative fee” at closing that mysteriously was in addition to the promised commission to that realty office. Not every realty office has been doing this, but I have no way of finding out which ones are. It is enough work for buyers to deal with additional fees and costs associated with getting a mortgage done, let alone having to deal with it still again on the property side. I’m not saying that all realty companies are ripping off sellers, but I am seeing instances of this going to court, and there is a percentage of people who won’t take the time and effort to bring it to court over a few hundred dollars.

My point is that there should be at least one source for consumer reviews of real estate transactions, but the realty offices involved should also have the opportunity to respond.

Almost 3 years ago I was one of the sellers of a multi-unit investment property and was not able to choose the realty agent I would have preferred. This agent did well at a couple of things, but also, in my opinion, screwed up on another which delayed the transaction and cost me an additional legal fee. Even knowing people on the inside, I realized that taking the time to complain to the brokerage or realty association may or may not have accomplished anything. I am 99% sure I wouldn’t have benefitted financially from doing so, and these matters remain internal. Yet, if I had a “public” place to show the documentation I had about the mess-up, I would put my side of the story against anything that agent could show in defense, and let the public make their own intelligent decision about whether or not to use her services.

For the thousands of properties which have sold within the past month, there are thousands of good and bad stories about the services rendered to make them happen, with thousands of dollars at stake. I’ll admit it took me seeing the story about a consumer web site not related to or specific to real estate to make me realize the need.

My “to do” list now has another entry. To work on getting a “real estate transaction review” source in place and to do it soon. I’m sure almost every current and past home owner has a story (whether especially good or bad) about a realty agent or company to share. Meanwhile, thousands of realty agents and companies also have a response or defense ready, if only they had the opportunity to defend themselves. I’d like to get “future” home buyers and sellers to that information.

Please share yours at ideas@firstin.com .

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