A Baylor University study has found that most consumers rely on three basic factors when selecting a 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, then market sources, and lastly the agent's reputation.

In regard to social influences, 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 people 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 word of mouth extends to the ease of use of the agency's Web site, which gives buyers or sellers a clue about the agency's "potential quality." Satisfaction with an agency's Web site can lead customers to be more loyal and spread positive messages to others.

An agent's availability and "aggregation" in the market also play a role in determining agent choice, the research found.

Focusing on targeted neighborhoods could lead people shopping those neighborhoods to associate "sold" and "available" houses with that agent, the data indicate.

"Consumers may be aware of the Realtor's name and have visited the Web site, but unless they see that the agency is active in the neighborhoods they find desirable, the agency won't be getting a call," says 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, honest, establishment, experience, and knowledge.

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. In addition, an agent with a good sense of humor is more likely to have a positive reputation.

"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 says.

Also, customers expect the agent to be honest about the market and to have knowledge about when the house will sell.

The focus group found that 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.

Customers also use establishment, or length of time in the business, as a surrogate indicator of quality. 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 says. "Rather, as long as the brand is recognizable, they were more likely to rely on 'whose signs you see the most' in the area."

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 says.

Additionally, the focus group discussed the need to find agents with a reputation for knowing the particulars of the local market for buyers, such as knowledge about schools and other geo-demographic statistics, and for sellers, meaning how to market a property.