Reader Question: We will be selling our home and casually checking out real estate agents. One of our observations is that some agents seem to have many online customer recommendations while others have very few or none. How important are these recommendations and why don’t all agents use them?

Monty’s Answer: Positive reviews from real estate websites are increasingly important to agents that invest significant dollars in obtaining leads. Glowing online endorsements appear to influence potential customers. Reviews for real estate agents, hotels, movies and many consumer products and services are more prominent with the advent of the Internet. Many of today’s websites encourage consumers and service providers to engage with reviews on company sites. The primary intent of online reviews from the websites perspective is to promote features that drive up web traffic and revenue on their sites.

The effects of growing Internet reviews

> Agents see the reviews as being efficient and are spending accordingly

> Agents seeking positive reviews are more aggressive in soliciting them

> Agents post inaccurate and sometimes non-existent reviews (http://bit.ly/2bhjJXK)

> The creation of new customer review management companies (http://bit.ly/2bd5NMG)

> The Federal Trade Commission has established legal guidelines (http://bit.ly/2bvPwD2)

> Litigation already exists over reviews and testimonials (http://bit.ly/2bdx94O)

Reviews and recommendations are out of control

Internet companies such as Yelp, Angie’s List, and Zillow have created the perception with consumers that good online reviews are important. Bad reviews can cost a company or individual business. While there are accurate good and bad reviews, concocting both types happens. It is not unusual that an aggrieved customer does not see their role in the problem and wrongly discredit a person or company. The perception these reviews are all accurate has caused some companies to staff up to protect their reputation and manage customer reviews.

Are these online reviews overrated?

The school is still out as to the actual impact on real estate and other businesses as well. The Internet is still evolving. One of the components that is missing today with these reviews is independent audits of the claims and actual observation of the qualification process within the referral organizations. It does not appear an independent company exists to verify the source and accuracy of the published online reviews and testimonials.

From a real estate agent’s perspective

Two years ago, Jonathan Osman, an agent in Charlotte, NC, posted an email on his website from a new agent starting a real estate company asking one of his associates to post a Five-Star review on a popular site. Osman says his agent never bought or sold a property with the new agent. I called Osman to learn if there was a reaction from the company posting the review, and he said there was not. Osman also mentioned he lost a listing just this week when the prospect stated they chose “an agent who had a lot more 5-star reviews.” I asked if this loss made him regret not caving into questionable practices and Osman’s answer was, “ I have principles.”

Competing for prospects is extremely competitive. One of real estate’s biggest myths is that good production translates into excellent service. Bill Petrey, an agent in Dallas, Texas, claims to have counted 2,320 different agents in Dallas who claim to be ranked No. 1.

There are good real estate agents that would agree that to ask for a customer’s recommendation is a poor practice and is an ethical issue. That may be one reason they have few, if any, recommendations. It is my experience that most consumers do not fill out and return report cards without prompting unless they have a complaint or exceptional service.

There are also good real estate agents that feel they have to ask for a good review because so many others are doing it. Agents pay for the exposure, and they see the agents that walk the line gain an unfair advantage. There are also capable agents that see nothing wrong with asking for a good rating right after they deliver a nice closing gift. Then, there are the agents who file false testimonials and game the system.

Many good agents have worked hard to earn their testimonials, yet there appear to many agents that are causing more and more consumers to question any testimony. There is no substitute for seeking testimonials directly from an agent and then following up with the person providing the recommendation.

“Richard Montgomery gives no nonsense real estate advice to readers most pressing questions. He is a real estate industry veteran who has championed industry reform for over a quarter century. Send him questions at DearMonty.com.”