Realtor selection process for consumers report by Daniel Cannon

REAL ESTATE

Maximizing Agents’ Potential for Consideration

AGENDA

1 The Real Estate Agent Selection Cycle 2 A Deeper Look at the Confirmation Process The Information Consumers are Searching for

3 Why Agent Websites Matter 4 The Feedback Loop in Real Estate Agent Selection 5 Executive Summary

METHODOLOGY

Sample Size | N=501 Consumers

Sample Characteristics

• Recent Buyers/Sellers (251): Selected a real estate agent, service, or home within the past 6 months

• Bought/Sold or Plan to Buy/Sell a home • Used/plan to use at least one media source to research real estate agents • 18 years or older • Critical industry screen

• Next Year Intenders (250): Intend to select a real estate agent, service, or home within the next year

April 15th – 28th, 2008

The Real Estate Agent Selection Cycle

The majority enter the real estate market with an agent Agent or Owner Real Estate Transaction

Hired an agent to help buy a house/condominium

83%

12% Hired an agent to help sell a house/condominium

49% Bought a house/condominium without an agent

34%

of Real Estate Consumers used an agent in their recent past purchase or sale

Sold a house/condominium without an agent

(Base: Recent Buyers/Sellers n=251) QS3a: More specifically, which of these have you done in the last 6 months?

Real Estate Agent Selection Cycle 1. Awareness Consumer typically initiates research process by asking a friend or family member for recommendations

4. Recommendation

2. Confirmation

Consumer recommends the agent they selected to friends or family looking for an agent

Consumer conducts follow-up research online to confirm the recommended agent will be the right agent for their needs

Word of mouth plays a significant role in driving initial awareness… Where do you remember first seeing or hearing about the agent you selected?

74% 12% 10% 5%

Word of Mouth Online Sources Other Sources Print Sources

(Base: Recent Buyers/Sellers Recalling Source of First Awareness n=198) Q13: Where do you remember first seeing or hearing about the agent you selected?

Average consumer uses 5 sources to research; with online being critical Sources Used Throughout Research Process

Average # of sources used: 5

94%

77%

34%

29%

Conferred with

Consulted the Internet for information

Used Print sources to gather information

Found information using Other sources

Word of Mouth sources

(Base: Recent Buyers/Sellers n=209) QS3b: When looking for or researching information about agents, what types of resources did you turn to? Please list as many as you can think of. QS5: Earlier you mentioned you recently bought or sold a house or condominium. Here is a list of sources others have used when researching this category, please tell us which of the following sources you used to gather information while making your selection.

Recommendations and online search currently dominate the other sources of influence… Average # of sources used: 5 WoM (net):

Online (net):

Print (net):

Other Sources (net):

94%

77%

34%

29%

88%

51% 44% 36%

32%

22%

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en atio tc n us s to S Tr m ad ale e s e pe r sh rs R on ea ow s/ lE ex st po at s e Se O nl ar in ch e S e Lo In ca arc h fo lS r ea Lo ma rc tio ca na h lb ls us In it in te es es rn s si E m et d i sp tes ai lf In r o lay te r n m b ad s U se et Y us in res ge ello s w ne Pa ra t ge B us ed s re in vi es ew s s di re c to Ye ry llo Pr w in /W ta hi ds te M p ai ag M lin ag e s g a fr om zin b u es si O ne ut do ss or C ad ou s po TV ns ad in s th e m R ai ad l io ad s

22% 20%17% 17% 13%12% 13%12%11% 11% 8% 8% 9% 8% 5%

(Base: Real Estate Agent Past Selectors n=209) QS3b: When looking for or researching information about agents, what types of resources did you turn to? Please list as many as you can think of. QS5: Earlier you mentioned you recently bought or sold a house or condominium. Here is a list of sources others have used when researching this category, please tell us which of the following sources you used to gather information while making your selection.

Most consumers spend a significant amount of time online searching for agents… Number of Hours Spent Researching Agent-Related Information Online (Among those who research online)

9% 1-3 hours

35% 13%

4-6 hours 6 to 9 hours 11-20 hours 21+ hours

14% 23%

Mean Hours: 12 Median Hours: 5 (Base: Recent Buyers/Sellers Using Internet n=157) Q16: Please think about your most recent agent selection process. How much total time did you spend online doing related research? Your best estimate is fine.

Consideration sets are reasonably high in this market… Agents Contacted and Seriously Considered Average # of Agents Contacted:

Average # of Agents Seriously Considered:

2.2

1.5

1% 7%

7% 31%

36% 4+ 3

27%

2 1

56% 35%

Contacted

Seriously Consider

(Base: Recent Buyers/Sellers n=209) Q10: How many agents did you visit/speak with in your selection process? Q10b: When ultimately selecting an agent, how many did you seriously consider paying for or doing business with?

…and online channel opens up the consideration set for agents even further Agents Contacted and Seriously Considered By those who researched and didn’t research online

Researched Online

Didn't Research Online

69% 52%

47% 32%

Contacted More Than 1 Agent

Seriously Considered More Than 1 Agent

(Base: Recent Buyers/Sellers – Researched Online n=159 | Didn’t Research Online n = 50) Q10: How many agents did you visit/speak with in your selection process? Q10b: When ultimately selecting an agent, how many did you seriously consider paying for or doing business with?

There are some slight differences between those looking for a buyer’s agent vs. a seller’s agent Differences Between Buyers and Sellers

Sources Used Throughout Research Process

Bought a home with an agent

Sold a home with an agent

Word of Mouth

93%

95%

Online

77%

76%

28%

42%

Other

24%

35%

13.42

10.03

Mean Hours Spent # of Agents Contacted

More than 1

57%

76%

# of Agents Seriously Considered

More than 1

31%

61%

(Base: Real Estate Agent Past Selectors – Bought a home with an agent n=124, Sold a home with an agent n=85) /{ Indicates percentage is significantly higher/lower than Sold a home with an agent at 95% confidence QS3b/QS5/Q10/Q10b/Q16

A Deeper Look at the Confirmation Process: The Information Consumers are Searching for

Multitude of Sources

WOM

ONLINE

TRADITIONAL

• • • •

• • • • • • • • •

• • • • • • • •

Recommendations Spoke with recent customer Salesperson Trade shows/expos

Real Estate Related Search Online Search Local Search Informational sites Real Estate Agent sites Internet display ads Email from Agents Internet Yellow Pages User-generated reviews Business directory

Newspaper or Magazine Ads Yellow/White pages Magazines Mailing from business Outdoor ads TV ads Coupons in the mail Radio ads

At a high level, online provides introduction to new agents, specific deals, and helps to locate agents Purpose for Using Each Resource

Learn about agents I didn’t know existed

Find special deals, offers, or promotions from an agent

Locate a specific agent

Learn about the agent’s reputation and read reviews

Online

45%

41%

45%

38%

Word of Mouth

34%

20%

50%

62%

38%

25%

38%

29%

Other Sources

34%

15%

39%

12%

(Base: Recent Buyers/Sellers – Those Using Each Source; Online (net) n=159, WoM (net) n=181, Print (net) n=65, Other Sources (net) n=59) Q8: Now, thinking specifically about how you used each of these resources while researching agents, please indicate what purpose(s) you used each one for. /{ Indicates percentage is significantly higher/lower than Average of Sources with sufficient base sizes at 95% confidence

Search engines tend increase consideration sets, while recommendations are important for location and reputation Purpose for Using Each Resource

Learn about agents I didn’t know existed

Find special deals, offers, or promotions from an agent

Locate a specific agent

Learn about the agent’s reputation and read reviews

Search Engines

40%

26%

41%

30%

Real Estate Search

32%

25%

24%

Local Search/IYP

31%

19%

39%

28%

Informational Sites

31%

29%

31%

Real Estate Agent Sites

26%

11%

40%

17%

Recommendations

29%

17%

50%

63%

Magazine Ads

27%

29%

20%

32%

Mailing from Business

33%

19%

33%

19%

(Base: Recent Buyers/Sellers – Those Using Each Source; Search Engines n=90, Real Estate Related Search n=106, Local Search n=67, Informational sites n=42, Real Estate Agent sites n=35, Recommendations n=158, Spoke with recent customer n=74, Magazine ads n=41, Mailing from business n=36) /{ Indicates percentage is significantly higher/lower than Average of Sources with sufficient base sizes at 95% confidence Q8: Now, thinking specifically about how you used each of these resources while researching agents, please indicate what purpose(s) you used each one for.

Consumers search in very distinct ways for real estate information; most use geo modifiers What types of keywords did you type into search engines to generate results?

City and/or zip code General category keywords re: agents Specific business name

76%

37%

34%

Type of agent/service interested in

31%

Type of home interested in

30%

General category keywords re: homes

29%

(Base: Recent Buyers/Sellers – Those Using Search Engines n=90) Q22: What types of keywords did you type into the search engines to generate results?

Quadrant Analysis Explanation

IMPORTANCE OF TOPICS SELECTION

Quadrant 1 illustrates the areas which are both heavily researched and most influential to the selection

2 4

Topics less researched but still influential to selection

most 1 Topics researched

Topics less researched and least influential to selection

and most influential to selection Topics researched but less influential to selection

Reputation and expertise of area is most important When looking for agents…

IMPORTANCE (TOP 2 BOX)

Familiarity/specialization in my area of interest References from previous buyers

Recent selling/buying record Rate of commission

List of services available

Average selling price

Level of experience/ years in industry

Contact information

TOPICS RESEARCHED FOR AGENT SELECTION (Base: Recent Buyers/Sellers n=209; Level of experience/years in industry n=85, Familiarity/specialization in my area of interest n=82, References from previous buyers n=71, Rate of commission n=72, Average selling price n=68, Recent selling/buying record n=64, Contact information n=49, List of services available n=32,) Q6: Which of the following topics did you research before selecting an agent? Q7: How important were each of these factors in helping you decide on the agent you selected?

Showing listing details and photos is critical

IMPORTANCE (TOP 2 BOX)

When looking for properties…

Features/ amenities of the home

Appraisal and inspection information

Detailed information about the property

Photos or visuals

Asking price

Information about neighborhoods and communities

Home loan rates and information

Houses recently sold in surrounding area

Home insurance plans

TOPICS RESEARCHED FOR PROPERTY SELECTION (Base: Recent Buyers/Sellers n=209; Level of experience/years in industry n=85, Familiarity/specialization in my area of interest n=82, References from previous buyers n=71, Rate of commission n=72, Average selling price n=68, Recent selling/buying record n=64, Contact information n=49, List of services available n=32,) Q6: Which of the following topics did you research before selecting an agent? Q7: How important were each of these factors in helping you decide on the agent you selected?

Why Personal Real Estate Websites Matter

There is an opportunity to influence consumers with personal and property websites Did you choose an agent with a personal website & How did you reach a real estate agent website? Among those who visited a realtors website

How did you reach the majority of the realtor’s sites you visited?

16% 86% of those who visited a realtor’s personal website chose a realtor with a website

74%

used a search engine

Visited Realtor Personal Websites (Base: Recent Buyers/sellers – Those Using Search Engines n=90, Those Using Real Estate Agent sites n=35) Q18: Earlier you mentioned you used Real Estate Agent websites while searching for your agent. How did you reach the majority of those websites? Q20: Did the [INSERT VERTICAL RESPONDENT IS ASSIGNED TO: “service or agent/doctor/ contractor/school/lawyer”] you ultimately chose have a website? (Please select one score per statement.)

Having a website increases consumers’ perceptions and trust of agents How your website can impact consumer thinking… (Top 2 Box - Among those who visited a realtors website)

49%

Increased my perception of the agent

Only used it to find the agent’s contact information

31%

Sealed my decision, I chose the agent after seeing their site

29%

Didn’t have a site so I decided against the agent

26%

Answered all my questions, fully informative

Was an unappealing site, so I decided against the agent

23%

11%

(Base: Recent Buyers/Sellers – Those Using Real Estate Agent sites n=35) Q19: Below are statements others have made about their experience using Real Estate Agent websites. Please read each of the statements and give a score between 5 and 1, where a ‘5’ means you ‘strongly agree’ with the statement and a ‘1’ means you ‘strongly disagree’ with the statement.

The large majority use these websites to look at photos of properties and get an overview of service… Information Looked for on Real Estate Business Sites Among those who visited a realtors website

67%

Photos/visuals

53%

Contact information Learn more about their services

47%

40%

Get approximate costs Read reviews and testimonials

27%

Look for special deals or promotions Schedule an appointment

(Base: Recent Buyers/Sellers – Those Choosing Agents with a Site n=30) Q20b: Thinking about the agent you chose, please indicate the ways in which you used their website.

20% 7%

… and of agents rejected, a big reason was not enough comprehensive information Reasons for Rejecting Agents Researched Online Of all the agents you researched online and didn’t choose, what were reasons why?

Didn’t offer what I wanted

37%

Didn’t offer enough information online

36%

Didn’t follow up on questions or requests

26%

Too expensive

25%

Didn’t have enough experience Read bad reviews about them

16% 12%

(Base: Recent Buyers/Sellers – Those Choosing Agents with a Site n=30, Using Online n=159) Q27: Thinking about agents you researched online and didn’t choose, what are your reasons for not choosing them?

The Feedback Loop in the Real Estate Agent Selection Cycle

While online is critical to research, in person interaction is typically needed to close a deal Communication with Agent

85% In Person

56% On the Phone

77% said “My final decision was influenced mainly by my In Person interactions” 74% said “I got the most information to help me make my final decision In Person”

27% said “My final decision was influenced mainly by my interactions On the Phone” 32% said “I got the most information to help me make my final decision On the Phone”

12% Online*

*Note: Base size for Online too small to report how final decision was influenced by online interactions (Base: Recent Buyers/Sellers n=209, Those Responding – In Person n=178, On the Phone n=116) Q11: Which of the following did you do when you ultimately selected your agent? Q11b: Please indicate which of the following interactions were most useful in your decision-making.

The large majority (72%) will recommend their agent, with more than half converting a friend Convincing Friends and Family – The Cycle Continues

28% None 4 or more

15%

3 20% 2 1

21%

56%

17%

Will convert at least one friend Those who research online are +52% more likely to convert at least 1 friend versus those who don’t

Recommendations

Today 1 in 10 will use review sites to find out more about agents – this number will continue to increase User Generated Content and Usage

Did not use to information on real estate agents

91%

Used to find information on real estate agents

44%

Strongly influenced their decision

(Base: Total n=400, Those Using UGC Websites n=61) QS3b: When looking for or researching information about colleges, what types of resources did you turn to? Please list as many as you can think of. QS5: Earlier you mentioned you recently selected a school. Here is a list of sources others have used when researching this category, please tell us which of the following sources you used to gather information while making your selection. Q25: Thinking about the user-generated reviews/review site(s), please indicate how strongly you felt it influenced your final decision. Please give a score between 5 and 1, where a ‘5’ means you ‘strongly agree’ with the statement and a ‘1’ means you ‘strongly disagree’ with the statement.

30 30

Executive Summary • The large majority of buyers/sellers (>80%) enlist the services of an agent to help navigate the complexities of the real estate market • Consumers typically consider ~2+ agents before making a selection • Consumers don’t always select what their friends/family tell them or who they’ve worked with in the past

• Word of mouth and online resources are most central to agent selection • Consumers typically gain awareness of prospective agents through recommendations from friends and family • Most consumers then want confirmation, and gather additional information online to ensure the selected agent will best meet their needs • Delivering a high quality experience is essential as word of mouth drives an agent’s business

Executive Summary continued • Agents can influence their selection by maximizing their online presence with websites and effective media investments • Be easy to find - Search engines and real estate-related search sites are the most popular online resources for learning about and locating agents; consumers cannot research agents they cannot find • Communicate rational benefits that matter - Consumers want agents with specialized experience and credit general, real estate-related, and local search engines, along with local business sites, for providing relevant information • Convey trustworthiness - Local business sites and positive references from previous buyers found online can increase consumers’ perceptions of agents

• Agents have the opportunity to increase awareness and consideration consumers by bringing their recommendations and referrals online • In the future, consumers may be more inclined to consult a more credible usergenerated review, making agents less dependent on traditional offline word of mouth recommendations

THANK YOU For more information, please contact: schwartz@yahoo-inc.com