How Do Consumers Choose An Agent? Part I

Mar 13, 2008  |  Michael Wurzer

I was talking on the phone the other day with Alex Chang from Roost and, through a broad-ranging discussion, we touched on the question of how consumers select an agent.  I’m very interested in honing in on how listing search is relevant to agent selection. I mentioned that last week when I was at the Clareity MLS Workshop, someone flashed a statistic that said 68% (or something lke that) of agent selections were by referral from someone the consumer knew (parent, sibling, friend, co-worker, etc.).

Upon reflection, that statistic wasn’t too surprising, because that’s how so many decisions are made. When I moved to Fargo from Minneapolis ten years ago, I selected an agent in Fargo from a referral from my brother. Think about this: I was coming to work for an MLS software vendor used by all the agents in Fargo, such that I had available to me all the data I could ever want on the productivity of every agent and yet my decision was made based on a referral from my brother. Why is that? We’re all looking for short-cuts. There is so much information available to us today that we need short-cuts, a way to synthesize the data and tell us what to do. If the 68% statistic is accurate, apparently those we already know and trust are just such a short-cut.

The last few days, I’ve been discussing with Greg Swann, Mike Farmer and others the value of a “seal of approval” as a short-cut for consumers. Greg’s theory is that we need an Underwriter’s Laboratory for real estate agents. Brian Boero from 1000Watt Blog agrees and adds the possibility that agent review sites like Homethinking, Agent Scoreboard or Incredible Agents might help fill the gap, too.  The commonality of these endeavors (let’s call them “agent search” or “agent recommendation systems”) is to provide the consumer a short-cut to deciding which agent to choose, as well as providing the agents a path (network) to the consumers.

In many ways, agent recommendation systems are the essence of the web movement, exposing more information to individuals and giving them more control.   The questions I want to pose in this post, however, are two: (1) is agent recommendation related to listing search; and (2) is agent recommendation likely to be ineffective or maybe even too effective.  I’m going to discuss the first question in this post and the second question in a later post.

Let’s go back to the beginning of the post, where it was posited that a large number agent selections are made by recommendation from people we know.  In light of this, listing search would seem to be quite separated from agent search.  If a consumer is looking for listings, have they already found an agent or are they wanting to find listings first and then find the agent?  Perhaps more important, is there a path from listing search to agent selection?  In many ways, the two seem in conflict, because the listing search is going to identify listing agents representing the seller and not the buyer.  (VAR Buzz has been conducting a great discussion on single-agent dual agency, showing the inherent conflicts in that practice.)

This raises a significant question about MLS listing portals that I’ve been pondering a lot lately.  During the Clareity conference last week, I was once again enamored  with Bob Hale’s presentation regarding  Chris McKeever from CRT was there, too, and he posted some details regarding the presentation.   Clearly, is driving a lot of traffic back to listing broker sites.  The question I have, however, is what is happening to that traffic?  How does a listing agent convert a buyer inquiry on their listing into a client?  Presuming most are not practicing single-agent dual agency, the most obvious answer would be that they refer the inquiry off to another member of their firm.  Is that what the consumer wants?  I’d love to see more data about how leads from MLS portals convert to customers.

Listing search does seem related to agent search on IDX sites, where the site owner is promoting mostly listings that are not their own.  Yet, the question remains, is a consumer looking for an agent when they are looking for listings?  In other words, are they going to pick an agent from their IDX site?  This question is raised most prominently by Roost’s model of a national portal rotating IDX sites.  When a consumer goes to Roost, they are directed into an IDX portal of a particular broker and inquiries on specific listings are directed to that sponsoring broker’s web site.  So, the question becomes, will the consumer value the tools being provided by that broker enough to select them as their agent?  Rephrased again, will the click-throughs convert to leads and the leads to customers?  That question likely will be answered in the near-term as Roost and other IDX vendors collect data on these metrics, and I look forward to learning more.

Unfortunately, I have more questions than answers about how or whether listing search relates to agent selection.  The path certainly doesn’t seem direct and yet listing content remains the gold everyone seeks.  The question is what is the most natural path for the consumer to take from listings to agent selection, or are the two really distinct?

Tomorrow, I’ll turn to the second topic I raised above, namely whether agent search or recommendation sites are a more natural path for consumers to select an agent.  One tentative title I have for the post is The Tyranny of Ordered Lists.

9 Responses to “How Do Consumers Choose An Agent? Part I”

  1. Mike Farmer says:

    I think many people will go directly to the listing agent from the listing service until they are educated in regards to representation.

    However, it might be an unsatisfying experience if the agent has done little more than post a listing on a site with no plan for dealing with inquiries.

    I venture there are very few agents who would suggest the consumer seek representation — they will simply attempt to sell the inquiring consumer on the listing and if not much interest is shown after further information is given, the consumer will be dropped an left to wander to another listing and another inquiry to a listing agent.

    This popping about from one listing agent to another is an inefficient process. If the consumer is lucky enough to get a connected agent who understands representation, the consumer will be educated and armed with the tools necessary to make the home-search process more efficient.

    We have a long way to go from listing viewing and dead end inquiries to excellent, efficient and educational service.

    Ad revenues generated by listing services who attract traffic won’t last and create financial success if added value is not a top priority because consumers will gradually drift away to where value is added by players who understand what consumers really need. It’s more than pictures and a hit and miss information experience.

  2. Alex Chang says:

    As you know Michael, I think this is a great issue. How does a consumer actually move from searching online to selecting buy-side representation? When lots of homes are sitting unsold, this feels like a really important question.

    Random thoughts:

    1) I firmly believe the smartest brokers & agents are going to figure out how to engage online searchers creatively to get that buy-side business – beyond offering listing alerts & “schedule a showing” buttons to capture “leads”.

    I don’t think there’s any question the trend is for consumers to do their initial research on their own (which hopefully saves agents time downstream), so IMO what’s important is that brokers/agents establish themselves as having expert insight beyond what the consumer can find out themselves.

    We all know searching listings is just the tip of the iceberg. Maybe the calls to action on your site should be to “comment on my latest blog post on TIC’s”, etc. Figuring out how to creatively step above the crowd is an opportunity for the best professionals to shine.

    2) Brand is important – It would be silly to think the average buyer is going to go through the whole process of searching for homes and agent selection in one linear path, during one sit in front of their PC.

    They’re going to be all over the place over the course of a month, two months. Visit a bunch of sites, do a lot of browsing, talk to friends for recommendations, and so on. And a good amount of that process is going to be online.

    So it’s key for brokers and agents to get their face & brand out there where their prospects are, in a memorable way. That way, when they come up in conversation, that customer says “oh yeah, I’ve seen them, they seem smart” in their head.

    This whole topic is obviously very important to us at because to Mike’s point, we know the visitors we send to our partners’ sites have to turn into real transactions. In order to be successful, we have to deliver a real tangible return to our clients.

  3. […] FBS Blog Conversations about the MLS industry, creating software, and employee ownership. « How Do Consumers Choose An Agent? Part I […]

  4. Victor Lund says:

    We surveyed the customers and learned that 30% of consumers who visit that site found their real estate agent at

    This and other fun facts are in the MLS Consumer Website Effectiveness study that can be downloaded (free) from the WAV Group website. also has a feature that reports how consumers rated their agent in a recent transaction.

  5. Victor, I’d love to know more about how the website helped consumers identify their agent. Did your existing work provide further illumination? If not, perhaps some additional research would be worthwhile. I know FBS would be interested in learning more.

  6. Victor Lund says:

    When surveying the registered users at, we asked a few questions related to this issue.

    Are you currently working with a real estate agent? 58.3% replied no, 41.7% replied yes. (pg. 20).

    Is helping you identify real estate agents you might be interested in working with? 27.7% answered yes, 72.3% answered no. (pg 23)

    Have you requested more information or scheduled an appointment to see a listing from HAR? 46.4% Yes, 53.6% No. (p 28)

    Here are some replies to questions by consumers who identified themselves as RECENT HOME BUYERS

    Did you use to find homes that you are interested in looking at? 97.2% yes, 2.8% no. (pg. 30)

    Did help you find the home you recently purchased? 83.3% yes, 16.7% no (pg 32)

    The aim of the survey was to understand the consumer relationship and feelings about to measure MLS consumer website effectiveness.

  7. From page 24 of your report: “[Buyers] said they found them when they continually ran across a listing agent in the neighborhood they were looking at or the price range they were interested in.” I’m very interested in learning how the listing agents handle these buyer inquiries in light of the problems from single-agent dual agency.

  8. Victor Lund says:

    Great question.

    I think that their is also a legal perspective here. Real estate closings are handled differently in different states.

    I suspect that dual agency only happens in the states where Title companies perform closings. I do not believe that lawyers handling closings are able to represent 2 parties in a transaction.

    Listing agents concerned by conflicts arising from dual agency can refer the client to an agent (get a referral fee). I think that this paradigm is what has driven the attractiveness of real estate teams.

  9. […] the pros and cons of on-line comments about specific listings.  This is a good extension of my posts from a week or so ago about how consumers choose agents.  The basic question I was asking in […]