Sellers beware: Agent rating sites ‘a massive trap’ for sellers (Baldwin)
As we’ve been advising our clients not to expect us to be on and to avoid those sites like “Rate my Agent”, “Sell My Castle” etc… Simply because they’re bias to the agents who pay them, be it monthly fee or a big chunk of their commission. Especially that not all agents, or at least the good ones, agree to pay to a third party as it is illegal.
Therefore, we thought this could make a good reading material and to warn sellers to talk to the agent and make their own opinion as to whom they’re going to trust to market and sell their property.
Agent rating sites ‘a massive trap’ for sellers: Baldwin
Tuesday, 22 March 2016
Certified Practising Real Estate Agent (CPREA) chairman Geoff Baldwin has warned that the multitude of agent rating and referral sites can be a “massive trap” for property sellers and can cost them dearly.
According to Mr Baldwin, while these sites assert that they honestly rate real estate agents in each suburb by their performance in the marketplace and a number of other criteria, sellers should be aware that there are other factors that can influence their rankings.
“Firstly, almost all of these sites are charging agents for the privilege, either through a regular monthly fee or via a significant slice of the commission being paid by the seller to the agent, often without the full knowledge of the seller,” he said.
“It is quite possible, even likely, that the top agents in an area or town simply don’t use the services of these sites, which means that the public is often in danger of being misled.”
Mr Baldwin highlighted that in some cases agents are able to pay extra for preferential placement in a particular suburb or town, resulting in prospective sellers being deceived into thinking they are dealing with a highly successful agent when in fact they may be dealing with one who is battling to attract business in any other way.
“Successful, professional agents who have built a good reputation based on their results rarely resort to using these websites to gain business. However, new and lesser performers see them as a way to gain an advantage,” he said.
“Sellers should be aware that these websites are not free public services; they are businesses and they are making money through charging agents to be promoted and/or for the leads that are gathered from potential sellers who visit the sites.”
Mr Baldwin warned that the public is often fooled into thinking they are seeing agents promoted based on their merits, when in fact the information on many of these sites is “misleading” and “should be closely examined” before being allowed to influence a decision.
“Choosing an agent should be based on the real performance, experience, results and resources of the whole agency and the brand they work with, and importantly how a seller feels, as the quality of the business relationship is a big influence on the process,” he said.
“Quality agents prosper on their own reputation and will rarely pay for leads, so choosing an agent based on these so-called third-party ratings can cost sellers many thousands of dollars through signing up with the wrong agent.”
Mr Baldwin urged people who are considering using these sites to inquire as to how they make money, what they charge the agents, whether agents are paying for preferential promotion and how their business model actually works.