- The Washington Times - Wednesday, April 26, 2006

If you are a new homeowner who likes the way your builder has been handling your complaints about that cracked tile or needed touch-up, you can thank a shoe salesman. And if you have been benefiting from some extra special service from your real estate agent while you have been trying to buy or sell your home, you can probably thank a shoe salesman again.

What do shoe salesmen have to do with real estate? Not much, at first glance. But they have a lot to do with customer service.

“Builders now see themselves in the same place as Nordstrom,” says Bob Mirman, CEO of the Irvine, Calif.-based firm Eliant Inc. (formerly National Survey Systems), which tracks customer expectations and concerns and counsels builders on the best way to keep customers happy.

Builders, Mr. Mirman says, have “had to change from being relatively insensitive to customers, like banks and hospitals once were, to making customer service a priority.”

Today, home builders routinely offer options like granite counters and hardwood floors that home buyers could have hardly dreamed about just 20 years ago. And real estate agents are more available, friendlier and more willing to go out of their way to get information for you than ever before.

Upscale builders often survey their clients repeatedly to get feedback about customer satisfaction over time.

“Builders and agents always respond to market pressures,” says Blanche Evans, editor of Realty Times, an online real estate news service. “And people now are more demanding because society as a whole is more demanding.”

To be honest, just about everyone this day is looking at a whole new ballgame when it comes to real estate.

“Today the home building industry is as different as an industry could be in terms of customer sensitivity,” Mr. Mirman says.

Changes in the industry include increased consumer awareness of creature comforts, as well as increased expectations for what services should be provided.

Builders seem to be heeding the calls.

A 2005 survey by the National Association of Home Builders (NAHB) noted that customers seem more satisfied with their service than previously.

“Over time, the character of callbacks has shifted,” says Steve Melman, NAHB’s director of economic services. “Two-thirds of our respondents of the 500 builders we interviewed had only one or two callbacks per unit.”

Mr. Melman says a driving factor in such a change has been the increasing share of the new home market taken by large builders who have a financial incentive to be much more efficient.

“Many have had homes on back order for the last three years,” he says. “They want to build a better home and move on.”

In other words, builders may find it less expensive in the long run to pay for that extra amenity you crave than to keep the house on the market for another month or two.

“Builders don’t want to come down on price,” Mrs. Evans says, “but in a slower environment they might be willing to come up with an extra amenity.”

In a really hot market, though, when just about every home is garnering multiple offers, customer service can matter less — if not at all.

“As a rule, people are willing to forgo certain things in order to get a house,” says John Parker of Coldwell Banker’s Capital South Office in the District.

As the market changes, so can the quality and quantity of service.

“The buyer is going to assume, and rightly so, that the builder is not planning to give anything away,” Mrs. Evans says. “But in a softening market, the builder is going to measure that amenity against carrying the property for a longer period of time.”

In a slower market, customer satisfaction is going to be crucial for builders, Mr. Mirman says, “Referrals are going to become even more important. Builders are going to have to delight, not just satisfy, the home buyer.”

But the really big change, Mrs. Evans says, began with the passage of 1997’s Tax Relief Act, which allows homeowners to collect capital gains with a move within two years of purchase. That’s when consumers started to change their buying habits.

“Now, if you sell your home within two years of ownership you can still collect capital gains [with expanded tax limits],” she says. “Previous generations had far less mobility.”

So homeowners whose parents might have lived in their homes for 30 years or more suddenly found it easier, and often profitable, to move.

Builders suddenly found themselves looking for repeat business.

That’s why builders spend a lot of time and money trying to find out what buyers want in a home.

“Builders they tend to do a good job at keeping up with trends,” Mrs. Evans says.

Meeting buyer expectations realistically and consistently is a key for builders, Mr. Mirman says. Another is communication.

“You need to keep the buyer informed about the things that are going on,” Mr. Mirman says. “You want to create trust, not anxiety.”

Mr. Mirman tells the 500 builders across the country who are associated with Eliant that they should establish a level of customer service that they can meet or beat 95 percent of the time.

“If you tell buyers what to expect and be honest about it, they’ll respect you,” Mr. Mirman says. “Loyalty is based on honesty.”

The rules have changed, as well, for those who facilitate buying and selling. Twenty years ago, most real estate agents worked solely for the seller. Today, many offices are dedicated to working for buyers.

Meanwhile, the Internet means that the computer — not the real estate agent — often provides the first stop for home buyers. A recent survey by the National Association of Realtors found that 75 percent of home buyers use the Internet to help them search for a home, and nearly a quarter — 24 percent — first learn of a home from the Internet. That figure is up from 15 percent in a 2004 survey.

Web sites like the new Zillow.com allow potential buyers to zero in on neighborhoods, look at data about previous sales, and compare prices on similar properties. You can even use online software to estimate the value of your home.

All this translates into some big-time worries for real estate agents, who necessarily focus on the human touch as the one thing that can give them an edge in real estate transactions.

When Coldwell Banker’s John Parker meets with potential customers in his Capital South office, he makes sure to get in some meeting time before venturing into the neighborhoods.

“I like to get a face-to-face before we go out on the street,” says Mr. Parker, an 18-year veteran in the real estate business who says 99 percent of his business today comes from buyers. “I want to know how well they know the area, and if they’ve been pre-approved for a mortgage. Ten years ago, you didn’t even ask that question.”

Every once in a while, providing good service to a customer can mean that the latter can be, well, a bit taken aback.

“Sometimes you have to hit them between the eyes,” Mr. Parker says. “You have to tell them how to prepare their house for market, and that often means a substantial cleanup or a change in lifestyle. I’ve had clients where the best thing they could do to get their house in a showable condition would be to move.”

But the service doesn’t stop there. Mr. Parker’s office carries a list of vetted local contractors that is distributed to new homeowners.

“These tend to be older properties, and things will go wrong,” Mr. Parker says. “Homeowners know an 1896 house is not perfect and there are certain things they are going to encounter during their term of ownership, but they also want to know who are the best people to fix the problem.”

Today, real estate agents try to do more than just listen in order to keep that human touch. They may specialize in everything from farms to vacation homes to first-time home buyers. And services for seniors are a growing concern.

“The first-time home buyer needs the most service,” Mrs. Evans says. “Seniors may have a lot of equity in their homes, but they have a lot more retirement issues. For many people, retirement is not going to be there like they thought it was.”

In the next few years, Mrs. Evans says she expects to see senior financial planners in many real estate offices, along with people providing even more specialized services, like help with mortgages and other paperwork.

“Now, competent real estate agents have so many jobs to do to get and keep customers it’s really very difficult,” she says. “But if they get support at the gopher and paperwork level, they can really concentrate at serving the client at a personal level. It’s going to be great for consumers.”

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