ZipRealty Inc. is making public the customer satisfaction ratings that it’s been collecting on its agents for nearly a decade, providing prospective buyers and sellers with a means of vetting agents on the company’s own Web site.

Many third-party Web sites already give consumers the opportunity to rate the services provided by real estate agents and professionals in other fields. Others have sprung up offering to assist those being rated with "online reputation management."

ZipRealty Inc. is making public the customer satisfaction ratings that it’s been collecting on its agents for nearly a decade, providing prospective buyers and sellers with a means of vetting agents on the company’s own Web site.

Many third-party Web sites already give consumers the opportunity to rate the services provided by real estate agents and professionals in other fields. Others have sprung up offering to assist those being rated with "online reputation management."

But ZipRealty claims it’s the first national brokerage to provide access to ratings of its own agents.

A spokesman for ZipRealty said that company will report verbatim the average of scores consumers have given agents on a five-star scale. But the company will only publish positive feedback in a separate section for testimonials in each agent’s profile.

ZipRealty has employed a third-party vendor, Key Survey, to administer surveys to clients. Now, agents who have completed at least three transactions can expect the results of those surveys will be available to the public.

Last week, when the process of adding ratings to agent profiles on the company site was still underway, feedback was available for about half of ZipRealty’s 2,800 agents.

Clicking on the profile of San Francisco-based ZipRealty agent Miranda Pan, for example, revealed she’d earned 4.7 out of 5 stars in 18 client reviews. Pan, who specializes in condominiums, tenancies in common, two- to four-unit properties, lofts and investment properties, also had testimonials from eight clients totalling 800 words posted with her profile.

While some of the testimonials were short and quite general, all were positive. A few went into some detail.

"Miranda is the sort of person who doesn’t take ‘no’ for an answer," one of Pan’s past clients wrote. "When the listing agent didn’t return her repeated phone calls, she drove to his office across town and sat in his reception area until he agreed to speak to her. It is this total dedication which makes Miranda a fantastic Realtor."

Last week, ZipRealty said it added 551 agents during the third quarter — a 21 percent increase from a year ago — and boosted transactions by 31 percent, to 5,019. That helped the company trim losses for the quarter to $1.7 million (see story).

In a more detailed quarterly report to investors, the company said it views customer acquisition as one of its "core competencies." According to online metrics tracker Hitwise, the company’s Web site is the fifth most visited in the real estate category.

But ZipRealty executives think continuing deterioration of housing markets will make it increasingly difficult to acquire online leads, the report said. The company hopes to offset that by doing more repeat and referral business, and "increasing our visibility and credibility to potential clients over time."

ZipRealty has also been able to shore up revenue by reducing the commission rebates it offers buyers several times, the company said. It’s done so, the company told investors, by "demonstrating superior service."

Where permissible by law, ZipRealty provides cash rebates to buyers, and represents sellers for less than most traditional brokers. ZipRealty reports that typically, seller clients pay a total brokerage fee of 4.5 percent to 5 percent of a home’s sale price, of which 2.5 percent to 3 percent is paid to agents representing buyers.

Although most of ZipRealty’s business has come from representing buyers, one of the company’s growth strategies is to increase the proportion of sellers it represents.

"If we fail to recruit, hire and retain qualified agents, we would be less able to service our clients and our growth would most likely be impaired," the company warned investors.

Competition for qualified agents is intense, the company said, and retention is "an industrywide issue." ZipRealty may be at an added disadvantage because of the lower commissions its agents earn, the company said.

ZipRealty has experienced "a high degree of agent turnover" in the past, the company said — mostly in the first few months a new agent is employed.

High turnover means ZipRealty must "expend a substantial amount of time and money to replace agents who have left," and could slow expansion into new markets. The company warned it may have to resort to employing "a significantly higher number of new agents with less experience … which could cause us to be less effective at expanding our market share in our existing markets and entering new markets."

Founded in 1999, ZipRealty first turned a profit in 2003, and then made money in nine of 16 quarters from 2003 to 2006 before ending up back in the red during all of 2007 and the first nine months of 2008.

After expanding into 10 new markets in 2007, the company scaled back the pace of growth this year, opening offices in Long Island, N.Y., in March and Hartford, Conn., in July.

***

What’s your opinion? Leave your comments below or send a letter to the editor.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Don’t miss out! Inman Connect Las Vegas starts tomorrow and you can catch all the excitement with a virtual ticket.Register Now×
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription