WESTLAKE VILLAGE, Calif.: 10 July 2013 — As the real estate market continues its recovery, real estate companies that are able to effectively serve the needs of the large first-time home-buyer and -seller market will be better positioned to increase market share, according to the J.D. Power 2013 Home Buyer/Seller Satisfaction StudySM released today.
The study, now in its sixth year, measures customer satisfaction among first-time and repeat home buyers
among the nation's largest real estate companies. Overall satisfaction is measured across four factors of the home-buying experience: agent/salesperson; real estate office; closing process; and variety of additional services. Satisfaction is evaluated across five factors for the home-selling experience: agent/salesperson; real estate office; closing process; marketing; and variety of additional services.
- Overall customer satisfaction with real estate companies is higher among repeat versus first-time customers.
- The real estate market has experienced an increase in foreclosure and short sale transactions during the past year.
- Customers are more loyal to their real estate company than to their sales agent.
Overall satisfaction with real estate companies is higher among repeat customers compared to first-time buyers or sellers. The average score among repeat home buyers is 817 on a 1,000-point scale and 803 among repeat home sellers. The industry average for both the first-time buyer segment and the first-time seller segment is 797.
The percentage of first-time home buyers increases significantly in 2013, compared with 2012 (49% vs. 40%, respectively). The percentage of first-time home sellers increased to 44 percent in 2013 from 30 percent in 2012. Related to the increase in the first-time buyer/seller market, the average listing price in 2013 has dropped by 11 percent from 2012 ($200,000 vs. $225,000, respectively). Foreclosure purchases have increased to 19 percent from 17 percent year over year, and short sale purchases have increased slightly to 15 percent from 14 percent. However, there has been a larger increase in short sales by sellers, to 20 percent in 2013 from 14 percent in 2012. Considering that nearly one-fifth of home real estate transactions include a foreclosure or short sale, it becomes that much more important for customers to be informed during every step of the process in order to understand and be comfortable with the pricing strategy or purchase price and to remain connected to the real estate company, even after the close of the transaction.
"Real estate companies remain challenged in adapting their customer service approach to best meet the needs of first-time home buyers and sellers. They need to educate these customers by explaining the current state of the market, discuss foreclosure and short sale transactions, and walk them through every step of the closing process," said Christina Cooley, director in the diversified services industries practice at J.D. Power. "Those real estate companies that are best able to adapt to specific customer scenarios and their resulting expectations and needs are much more likely to be successful in achieving customer satisfaction and loyalty."
Customer advocates for real estate companies are critical, as first-time home buyers and sellers are most influenced by a company's good reputation and the recommendations they receive from friends, family and colleagues. More than one-third (35%) of first-time home buyers and 27 percent of first-time sellers indicate they selected their real estate company based on its reputation, while 28 percent of first-time home buyers and 27 percent of first-time sellers selected their company based on recommendations.
"A real estate company's agent remains the most important aspect of the customer's experience among first-time and repeat home buyers and sellers; however, customer loyalty is first to the company and second to the agent," said Cooley. "Interestingly, less than 20 percent of customers say they "definitely will" switch real estate companies if the sales agent moves to another company. In the end, it is the combination of the company's standards, processes and approach to addressing customer needs combined with outstanding execution by the sales agent that will truly differentiate the customer experience."
First-Time Home-Buyer Satisfaction Ranking
Prudential Real Estate (811) ranks highest in overall satisfaction in this segment and performs particularly well in all factors. RE/MAX (798) ranks second in customer satisfaction, followed by Century 21 (797).
Repeat Home-Buyer Satisfaction Ranking
Prudential Real Estate (829) ranks highest in overall satisfaction in this segment, followed by Century 21 (820) and RE/MAX (819). Prudential Real Estate scores highest in three of the four factors--agent/salesperson; variety of additional services; and closing process. RE/MAX ranks highest in the real estate office factor.
First-Time Home-Seller Satisfaction Ranking
Prudential Real Estate (809) ranks highest in overall satisfaction in this segment, followed by Keller Williams (802), RE/MAX (800) and Century 21 (799). Prudential Real Estate performs particularly well in the marketing and closing process factors. Keller Williams performs particularly well in the agent/salesperson factor; RE/MAX performs well in the real estate office factor; and Century 21 performs well in the variety of additional services factor.
Repeat Home-Seller Satisfaction Ranking
RE/MAX (819) ranks highest in overall satisfaction in this segment. Following RE/MAX in the rankings are Century 21 (816) and Prudential Real Estate (809). RE/MAX performs particularly well in the agent/salesperson and marketing factors. Century 21 performs well in the closing process factor.
J.D. Power offers the following tips to consumers shopping for or selling a home:
- If you're buying or selling a home under special circumstances, such as a foreclosure or short sale, ask your real estate agent to explain the implications of these transactions and the responsibilities of the buyer and the seller. Be aware that short sales may take a long time to negotiate; closing costs may be high; and the property may require numerous repairs.
- Don't just focus on short sales or foreclosed properties because you think you can get a bargain. The price is still likely to be in line with market value, and any required repairs will add to the total cost. Finding a home in move-in ready condition might save you money in the long run.
- Be aware of all the services your real estate company offers, such as inspections, appraisal, mortgage company recommendations, home insurance and home warranty. Take advantage of any opportunity to make the process easier for you.
- When you're shopping for a real estate agent, consider both the company and the individual. It's important that you and the agent have a good rapport, but it's also important to choose an agency that can provide comprehensive services and has a proven record of success in helping home buyers and sellers.
The 2013 Home Buyer/Seller Satisfaction Study includes 4,371 evaluations from 3,930 customers who bought and/or sold a home between March 2012 and April 2013. The study was fielded between April 2013 and June 2013.
About J.D. Power
J.D. Power is a global marketing information services company providing performance improvement, social media and customer satisfaction insights and solutions. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. Headquartered in Westlake Village, Calif., J.D. Power has offices in North America, Europe and Asia Pacific. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power is a business unit of McGraw-Hill Financial.
About McGraw Hill Financial
McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power, McGraw Hill Construction and Aviation Week. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com.
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