When Bigger Isn’t Always Better: What Online Reviews Really Tell Us in Real Estate

Jan Klostermann, PhD, Anne Mareike Flaswinkel, PhD, Chris Hydock, PhD, and Reinhold Decker, PhD

Online reviews are now one of the most influential tools guiding consumer choice. Buyers and sellers of real estate often turn to platforms like Google, Yelp, or Zillow to evaluate brokerages and agents before making contact. But do these ratings provide an accurate picture of client satisfaction, or are they biased by factors unrelated to service quality?

A recent study published in the Journal of Marketing investigated why large firms like Starbucks or McDonald’s often receive lower star ratings than their smaller competitors, even when their actual quality is the same. The findings reveal that consumers’ empathy—or lack thereof—toward businesses shapes how they review them. Smaller businesses benefit from more positive word of mouth because people are more likely to feel empathy for them and want to help. Larger businesses suffer because that empathy diminishes, making customers more willing to post negative reviews and less motivated to share positive ones.

This insight matters directly for real estate. If online ratings systematically understate the quality of larger brokerages, sales managers and agency leaders may misinterpret client satisfaction, underestimate their competitive standing, or adopt misguided strategies. Likewise, smaller firms may assume their strong ratings guarantee lasting advantage when, in reality, this edge depends heavily on sustaining consumer empathy. This article outlines the research, explains why the empathy effect matters in property markets, and provides concrete recommendations for sales professionals, clients, and agency leaders.

Why Large Firms Appear to Have Lower Ratings

The study analyzed word of mouth across multiple platforms—Yelp, Amazon, Twitter, Instagram—and found a consistent pattern: as company size increases, online review scores decrease. In one example from the restaurant industry, the relatively small chain In-N-Out held a Yelp rating above 4 stars, while the larger Chick-fil-A averaged closer to 3.3. When adjusting for company size, the researchers showed that the two firms’ scores would be nearly identical.

The mechanism driving this pattern is empathy. Consumers empathize with smaller companies, seeing them as more vulnerable. Reviewers are more likely to post praise and more hesitant to share criticism. With larger firms, the opposite holds: customers perceive them as faceless, resource-rich organizations that don’t “need the help.” Positive experiences go unshared, while negative experiences are more readily broadcast.

For real estate, this means a boutique brokerage with 15 agents will likely enjoy warmer ratings than a multi-office firm with hundreds of salespeople—even if both deliver the same quality of service. This empathy-driven bias can distort consumer perceptions and mislead managers trying to track satisfaction over time.

Implications for Real Estate Professionals

For individual agents and brokers, the empathy effect carries several implications. First, do not assume that online reviews provide an objective measure of quality across firms. A lower star rating does not necessarily mean clients are less satisfied; it may simply reflect the structural disadvantage of working under a large brand.

Second, cultivate empathy at the personal level. Even within a large brokerage, agents can create “small company” impressions through authentic interactions. Encouraging satisfied clients to share their stories online can help counteract the natural reluctance to post positive reviews for large organizations. Personalized thank-you messages, check-ins after closing, and empathetic responses to feedback can all humanize the relationship and increase the likelihood of favorable word of mouth.

Implications for Home Buyers and Sellers

For consumers evaluating real estate professionals, the findings serve as a reminder: online ratings are not a level playing field. A five-star review average for a small firm may partly reflect consumers’ empathy bias, while a three-and-a-half star score for a national brand may underestimate service quality. Buyers and sellers should look beyond the average rating and consider the content of reviews, the consistency of themes, and the professionalism of responses.

Understanding the empathy effect can help clients make more informed choices and avoid dismissing larger firms unfairly. Many established brokerages have systems, training, and resources that benefit clients, even if their average rating lags behind smaller competitors.

Implications for Managers and Leaders

For sales managers and agency leaders, the key takeaway is that online review trends must be interpreted with caution. Tracking word of mouth over time without accounting for size effects risks misdiagnosing the health of the business. For example, a firm that grows from 50 to 200 agents may see its star rating decline and mistakenly conclude that client satisfaction is deteriorating. In reality, the shift may simply be a byproduct of growth as perceived by consumers.

To mitigate the impact of size bias, managers should supplement review data with internal surveys, client follow-ups, and repeat business metrics. They should also coach agents to actively request reviews after positive experiences, as satisfied clients in large firms are less likely to post on their own. Finally, the way the firm responds to reviews matters greatly. The study finds that empathetic responses—personalized, emotional, and directly addressing client concerns—help rebuild the empathy gap that large organizations face. Generic acknowledgments are less effective.

Conclusion

The research shows that company size exerts a powerful, often hidden, influence on online reviews. Large brokerages and property firms may have lower overall ratings not because their clients are less satisfied but because customers empathize less with big organizations. For real estate professionals, the message is clear: do not overinterpret differences in review averages across firms of different sizes, and do not equate a dip in ratings during expansion with a true decline in service.

Instead, professionals should focus on strategies that build empathy at the client level. That means responding thoughtfully to reviews, encouraging satisfied clients to share their experiences, and reinforcing a human, personal connection even within a large organization. Leaders should complement review monitoring with internal metrics and recognize that size can artificially depress word of mouth. For consumers, the lesson is to read reviews critically, considering not just the stars but the stories behind them.

In practice, real estate professionals should do more to humanize their interactions, say more in empathetic responses to online feedback, and show clients that their experiences matter. By doing so, they can counteract the structural disadvantages of size and ensure that their reputation in the marketplace more accurately reflects the quality of service they deliver.

Recommended Reading

Klostermann, Jan, Anne Mareike Flaswinkel, Chris Hydock, and Reinhold Decker (2025), “The Effect of Company Size on Aggregate Word-of-Mouth Valence,” Journal of Marketing, 89(5), 130-151. https://doi.org/10.1177/00222429251320603

About the Authors

Jan Klostermann, PhD
Assistant Professor, University of Cologne (Germany)
Dr. Jan Klostermann (PhD – Bielefeld University, Germany) research focuses on the intersection of brand management and social media marketing with an emphasis on topics such as word-of-mouth, influencer marketing, and brand positioning. He analyzes unstructured textual and visual user-generated content from social networks and online review platforms using methods of natural language processing and computer vision. His work has been published in leading journals such as Journal of Marketing, Journal of the Academy of Marketing Science, and the International Journal of Research in Marketing.

Anne Mareike Flaswinkel, PhD 
Research Associate, Bielefeld University (Germany)
Dr. Anne Mareike Flaswinkel’s (PhD – Bielefeld University, Germany) research lies at the intersection of consumer behavior, communication, and digital technology. Her work explores how psychological and social processes shape the ways consumers interact with brands, technologies, and one another in digital environments. Her doctoral research focused on the psychological and social processes underlying consumers’ interactions with brands. She has a particular interest in understanding how emotional triggers, social dynamics, and individual motivations influence perceptions, decision-making, and digital communication behavior. Her research contributes to a deeper understanding of digital consumer behavior and how technology transforms the relationship between consumers and the marketplace. Her work has been published in journals such as the Journal of Marketing, the International Journal of Internet Marketing and Advertising, and transfer – Zeitschrift für Kommunikation und Markenmanagement.

Chris Hydock, PhD
Assistant Professor of Marketing, Tulane University
Dr. Chris Hydock’s (PhD – George Washington University) research spans the domains of brand activism, consumer reviews, behavior in queues and retail pricing. He employs a variety of methods in his research, including secondary data, surveys, field studies and experiments. Hydock’s research has been published in journals including the Journal of Marketing, Journal of Marketing Research, Management Science, and Journal of Public Policy and Marketing. 

Reinhold Decker, PhD
Professor of Marketing, Bielefeld University (Germany)
Dr. Reinhold Decker’s (PhD – University of Karlsruhe) current research focuses on the development and empirical testing of methods and models for collecting and analyzing consumer data, particularly data from social media, as well as data-driven and consumer-centered development of (intelligent) products and services. Dr. Decker is the author and co-author of numerous articles on marketing and data analysis in scholarly journals, conference proceedings, and edited volumes, as well as the author and co-editor of scientific works on related topics. To date, the results of his research have appeared in approximately 240 journal, proceedings, and book publications. Journals include, among others, Business and Information Systems Engineering, Central European Journal of Operations Research, International Journal of Market Research, International Journal of Research in Marketing, Journal of Business Research, Journal of Consumer Behaviour, Journal of Marketing Research, Journal of Neuroscience, Psychology, and Economics, Journal of Product Innovation Management, Journal of Product and Brand Management, and Review of Managerial Science. He has been or is a member of various national and international scientific societies (including positions on boards, presidiums, or advisory boards) and has served on editorial boards of international journals. Reinhold Decker has acted as a reviewer for numerous international scientific journals, societies, and organizations. Additionally, he has served on the scientific program committees of several national and international conferences.