Agent Ratings and Social Capital

When I first started selling real estate in the 1980s, the best advertising that money could buy was a full-page ad in the local newspaper. Three decades later, the best advertising for a brokerage or individual agent can't be bought with money: a five-star rating on one of the growing number of agent-rating platforms or websites.

Some brokerages such as Redfin have proactively integrated agent-rating systems into their websites. Others partner with companies such as RealSatisfied to collect and publish verified client testimonials. This is part of a larger trend: consumers' increasing desire to validate their purchases and decisions through social proof.

The past decade has seen massive growth in Internet commerce and the simultaneous rise of social media. This has resulted in consumer transparency like we've never before seen. Customers want to offer advice about products and vent about issues in order to help others make the "right" decision. By providing social proof, consumers are also validating their personal feeling about a purchase.

Unlike traditional branding, advertising, marketing, or even newer native social media campaigns, money can't buy social proof. It can only be purchased with the most valuable currency in real estate: social capital. Put simply, social capital is your reputation, and everything that follows.

Measuring the Value of Social Capital

For a brokerage, social capital can be measured in the opportunities, referrals, word-of-mouth marketing, and — now — the public ratings you and your agents collectively attract.