Cincinnati, OH

Newswise - A Baylor University business study of recent home buyers and sellers found that most consumers rely on three basic factors when deciding on an individual real estate agent for buying or selling a home.

Through their focus group study, researchers with the Keller Center at Baylor's Hankamer School of Business found that consumers are likely to begin evaluating real estate agents by paying close attention first to social influences, followed by market sources and ultimately, the reputation of the agent.

The study found that critical "word-of-mouth" referrals often come from friends who are real estate agents and from friends who had a good experience with a specific agent, indicating that individuals seek out others who have some level of experience in buying or selling real estate and with whom they already have a relationship.

Baylor researchers also found that the "word-of-mouth" extends to the ease of use of the realtor's website, which gives buyers or sellers a clue about the agency's "potential quality." Satisfaction with a realtor's website can lead customers to be more loyal and spread positive messages to others.

A realtor's availability and aggregation in the market also play a role in determining agent choice. Focusing on targeted neighborhoods could lead individuals shopping those neighborhoods to associate "sold" and "available" houses with that realtor, the Baylor research found.

"Consumers may be aware of the realtor's name and have visited the website, but unless they see that the agency is active in the neighborhoods they find desirable, the agency won't be getting a call," said Dr. Kirk Wakefield, professor of marketing and interim director of the Keller Center at Baylor.

Baylor researchers also discovered that what a consumer expects from an agent defines the kind of reputation desired. They categorized responses of home buyers and sellers along five dimensions:

· Comfort

· Honesty

· Establishment

· Experience

• Knowledge

Comfort. Recent research suggests that the strongest effect on consumer perceptions of satisfaction and loyalty with an agent is the comfort level the consumer experiences in working with the agent. An agent's reputation as being someone easy to work with is based on "word-of-mouth" received from others. In addition, an agent with a good sense of humor is more likely to have a positive reputation as someone customers want to work with.

"One test of whether or not you have a good sense of humor is whether customers laugh after you arrive or after you leave," Wakefield said.

Honesty. Customers expect the agent to be honest about the market and to have knowledge about when the house will best sell. According to the focus group, agents with a reputation for being honest are known to ask questions, listen intently and ultimately respect the client's wishes - particularly regarding price ranges. In contrast, those who felt manipulated by an agent offered negative "word-of-mouth" to others, thereby damaging the agent's reputation.

Establishment. Customers use length of time in the business as a surrogate indicator of quality. On an individual agent basis, being established means that the agent has been able to satisfy the needs of others long enough to remain in business, which could put newcomers at a disadvantage. "National brand" was not very important for home buyers selecting an agent, and researchers found it was somewhat more important for sellers.

"None [of the focus group] rated it as very important," Wakefield said. "Rather, as long as the brand is recognizable, they were more likely to rely on ‘whose signs you see the most' in the area."

Experience. Closely related to establishment, the focus group noted that the reputation of an agent is tied to the breadth and depth of experience of the agent. "Just like most employers seek employees who have some level of experience, buyers and sellers look for someone who is not going to be training on them," Wakefield said.

Knowledge. The focus group discussed the need to find agents with a reputation for knowing the particulars of the local market for buyers (knowledge about schools and other geo-demographic statistics) and sellers (how to market a property).

For more information on this report and other Keller Center research, contact Laura Indergard at (254) 710-4243 or Laura_Indergard@baylor.edu or go to http://www.baylor.edu/kellercenter.

Some housing experts say the next logical step for helping home owners with negative equity is loan forgiveness.

Home owners with no equity stake and no likelihood of having one anytime soon are increasingly likely to walk away. Some theorize that curbing that trend is the only thing that will stabilize the market.

The nonprofit Milken Institute has devised a plan that would use Fannie Mae to refinance underwater loans with government money. Under the plan, a private lender would provide the money for the value of the home and the U.S. Treasury would issue a second, interest-only loan for the portion of the current mortgage that is underwater. Every year the home owner keeps current with payments, the Treasury would forgive a portion of the loan.

The institute estimates that this would save 1.5 million homes from foreclosure or abandonment and cost taxpayers between $75 billion and $100 billion.

Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, approves that plan, but urges returning some of the appreciation to the original lender as a reward for patience.

"The idea that these loans are worth face value is a fiction," says Richard Green, director of the USC Lusk Center for Real Estate. "If we don't deal with [reducing] the balances, we're not really dealing with the problem."

Source: Los Angeles Times, Tom Petruno (06/27/2009)

Shortages of both skilled workers and quality materials during the housing boom of the late 1990s and early 2000s is contributing to a surge in construction defects, some housing experts say. Some municipalities also fell behind inspecting and certifying new homes.

Criterium Engineers, a national building-inspection firm, says that 17 percent of homes built in 2006 had at least two significant defects, up from 15 percent in 2003.

Construction defect insurance claims have declined in the last couple of years, "but the ones that are being filed are pretty severe in terms of the total damage alleged," says Paul Amirata, vice president of claims for France-based Axa Group, one of the world's largest business insurers.

Buyers of homes built during the boom should consider getting a thorough inspection by a building inspection engineer and reviewing purchase and warranty contracts carefully with an attorney, experts advise.

Source: The Wall Street Journal, M.P. McQueen (06/30/2009)

Avoid products that emit formaldehyde or other toxic gasses. Plywood, particleboard and carpets sometimes contain volatile organic compounds (VOC's) that diminish indoor air quality. To prevent contamination from VOC's, air your carpet and furniture out before bringing them in the house. You may also want to consider implementing proficient ventilation systems. For best results, make sure old air is cycled out of your home and new air takes its place. This may seem like common sense, but open windows and doors during warmer months. You may also want to consider installing bathroom and kitchen fans that allow contaminated air to escape the room. Finally, if you really want to move air through your house, experts recommend buying a heat recovery ventilator (HRV). Heat recovery ventilators are composed of two separate systems. One collects and disposes of old indoor air. The other system collects clean, outdoor air and distributes it throughout your home.

Mold is one fungus that's hard to beat. If moisture and oxygen are present on organic substances, there's a good chance mold will be there too. If you have water damage in your home, reduce the potential for mold growth by drying the damaged areas within 24 hours.

Finally, plant plants! Vegetation dramatically reduces indoor air pollution in your home and office. Recent research from NASA shows that plants draw in polluted air, transfer it to their roots and then convert it to food. Dracaena, Massangeana and Spathiphyllum are some of the more effective plants that adapt this method of conversion. For more information on how to diminish indoor air pollutants and create a safe and healthy atmosphere for your family, contact me today!