Satisfying homebuyers and sellers in a tight market increasingly depends on the provision of additional services and products like mortgages, appraisals, inspections and home warranties, according to a study by J.D. Power and Associates.
For its 2009 Home Buyer/Seller Study, J.D. Power surveyed 2,801 people who bought or sold a home between April 2007 and June 2008, gauging customer satisfaction with seven of the largest real estate brokerage franchises.
Among homebuyers, Keller Williams ranked highest for a second consecutive year, with a score of 806 on a 1,000-point scale. Keller Williams was followed by Coldwell Banker (801), RE/MAX (798), Century 21 (795), Prudential (781), ERA (744) and GMAC (731). The average score in the category was 791.
Coldwell Banker ranked highest among sellers, with a score of 815, followed by Keller Williams (801), RE/MAX (784), Century 21 (770) and Prudential (753). The average score in the category was 786.
As was the case last year (the first year for the study), the biggest factor in overall customer satisfaction with both buyers and sellers was agent performance. But the provision of additional services by brokers and agents played a bigger role in overall customer satisfaction than last year, J.D. Power said, increasing by 12 percentage points among buyers and 8 percentage points among sellers.
In last year’s study, Prudential rated highest among sellers and Keller Williams scored best among buyers.
In the latest study, agent performance was far and away the most important factor among buyers, accounting for 47 percent of the customer satisfaction score, followed by office (28 percent) and package of additional services (25 percent).
For sellers, the agent factor and marketing both accounted for 34 percent of the customer satisfaction score, followed by office (17 percent), and package of additional services (15 percent).
The scoring is based on a battery of questions weighted using regression analysis to find key drivers in customer satisfaction, said Jim Howland, senior director of the real estate and construction practice at J.D. Power.
Agent performance was a bigger factor in customer satisfaction in the 2008 study, accounting for 65 percent of homebuyer customer satisfaction and 43 percent for sellers.
That agent performance played a smaller role in determining customer satisfaction is an indication that they are providing a consistent level of service, and that there was more variation in the provision of additional services, Howland said.
"The agents are still very important for both buyers and sellers — that’s still the key driver — but the moral of the story is the additional services factor has taken on more importance," Howland said. Because only successful buyers and sellers were surveyed, they were more likely to have worked with successful agents, he said. …CONTINUED
"You’re dealing with the cream of the crop in agents who are doing transactions in tough times like this," Howland said. "If the agents are doing a good job, and across the board there’s a good experience, then other things that vary more become more important factors" in customer satisfaction.
J.D. Powers found consumers appreciate it when brokers and agents can provide, or help them find, additional services involved in buying and selling a home. For buyers and sellers, appraisals, inspections and home warranties are important components of customer satisfaction.
Appraisals are "where rubber meets the road for someone selling in a market where prices are falling," Howland said. When appraisals fall short, he said, "There can be some disappointment … that puts some angst on it."
For buyers, customer satisfaction can hinge on whether a brokerage has an in-house mortgage company or can refer them to a lender, Howland said. With buyers having a harder time qualifying for a loan, "If brokers are taking a position that (the buyer) go out and secure your own funds, that can be a touchy subject as well," he said.
J.D. Power found actual usage of additional services like home inspection, home appraisal and home warranty services was down from last year among both buyers and sellers. About half of buyers and sellers reported using home inspection and home appraisal services that were offered or recommended by brokers, and about one in three purchased home warranties.
The study did not track whether the services were provided by affiliated businesses or by companies recommended by brokers and agents.
The companies identified as having the highest level of customer service may enter into a licensing agreement with J.D. Power that allows them to use the company’s name in their advertising and marketing materials.
When the results of last year’s study were released, some Inman News readers questioned whether the practice of selling the right to publicize the study’s results affects its objectivity, and wondered why smaller, independent brokerages are excluded (see story).
Howland said that for statistical purposes, a minimum of 100 responses are required in both the buyer and seller segment. ERA and GMAC, for example, only show up in the ratings by buyers because not enough sellers rated the companies.
Any company that is rated can also buy "subscriptions" to see the detailed results of the survey and analytical reports prepared by J.D. Power, Howland said.
"We conduct the study regardless of whether a firm purchases a license agreement or not," Howland said. In some studies J.D. Powers conducts, the highest-ranking company may choose not to purchase the license to use J.D. Power’s name in its advertising, but could subscribe to the research.
"The main purpose of the study is to provide company executives with information they can use to improve their bottom line" through better customer service, Howland said.
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