International Journal of Consumer Studies ISSN 1470-6423

Discovering the variables that influence new home-buyer

service satisfaction
ijcs_801

581..590

Isabelina Nahmens and Laura H. Ikuma

Construction Management and Industrial Engineering, Louisiana State University (LSU), Baton Rouge, LA, USA

Keywords
Service quality, customer satisfaction, home
building, demographics.
Correspondence
Isabelina Nahmens, Construction
Management and Industrial Engineering,
Louisiana State University, 3128 Patrick F.
Taylor Building, Baton Rouge, LA 70803-6419,
USA.
E-mail: nahmens@lsu.edu
doi: 10.1111/j.1470-6431.2009.00801.x

Abstract
While home builders traditionally think of customer service in terms of upgrades and
mortgage options, home buyers are thought to view the quality of service on a much
broader basis. Previous research has identified five dimensions of service quality: appearance, reliability, timeliness, knowledge, and empathy. Home-buyer satisfaction with
service quality is then the result of home builders providing services that are perceived as
meeting or exceeding buyer expectations. Although much research has been done regarding home-buyer satisfaction with service quality, there is still a gap between builders and
home buyers perception of the quality of service. Builders need to identify and understand
home-buyer needs in order to constantly improve service quality. This paper describes an
exploratory study that focused on customer satisfaction with service quality. The objective
of this study was to assess the correlations between various factors on home-buyer expectations and their perceptions of service quality. Demographics considered in this study
included age, gender and household income, while transaction characteristics included
purchase price, number of occupants and house size. Characteristics such as higher
income, higher purchase price, and larger house size appeared to value dimensions such as
reliability most highly. Characteristics such as lower income, lower purchase price and
smaller house size appeared to value dimensions such as empathy and appearance most
highly. Gender, age and household size did not have significant associations with expectations or relative importance, but age and household size were associated with actual
perceptions of service dimensions. Understanding the influence of these variables on
customer satisfaction with service quality can positively impact home builders through
improved reputation and increased local referrals.

Introduction
The construction of single-family homes represented 46% of the
US construction industry and about 35% of total private construction during 2007 (US Census Bureau, 2008). The home-building
industry faces challenges in slower economies, and the burden is
on home builders to persuade consumers to purchase homes in a
buyers market characterized by high inventory, low consumer
confidence in real estate and potential credit difficulties. As
market pressures increase and home buyers become better
informed, builders are realizing the need to redesign their business strategy to remain competitive (Kerber, 2000). Furthermore,
Forsythe (2007) recognized customer satisfaction as a means of
achieving competitive advantage in the current market place.
Most new homes already include a wide variety of innovative
features, which leaves only quality of service to set a builder
apart from others offering similar homes in similar markets.
Large builders of new home construction typically have internal
sales personnel that play the role of the real estate agent. These

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real estate agents represent the builder and they are the first point
of contact for potential home buyers. Thus, home builders face a
critical challenge the need to thoroughly understand and define
home buyers needs for high-quality service, to better prepare
their personnel. Regrettably, many home builders do not recognize this need, and their present business processes do not
support it (NAHB, 2003).
Although much research has been done regarding home-buyer
satisfaction with their house and builders service, there is still a
gap between builders and home buyers perception of quality
(Torbica and Stroh, 2001; Bashford et al., 2002). Torbica and
Stroh (2001) showed that satisfaction with service is the most
important component shaping overall home-buyer satisfaction and
that service is the area in which builders demonstrated the poorest
performance. Thus, builders need to identify and understand buyer
needs in order to constantly improve service.
As in many other industries, understanding that old competitive
strategies may no longer apply is necessary (Fine, 1998). In the
case of the home-building industry, service quality is the new
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Variables influencing home-buyer satisfaction

competitive advantage to exploit (Rapert and Wren, 1998; Torbica

and Stroh, 2001; Bashford et al., 2002). Researchers and practitioners suggest that delivering superior service quality is a prerequisite for success in todays business environment. In 2007 J.D.
Power and Associates surveyed Central Florida homeowners
regarding customer satisfaction with their new home, including,
among other topics, sales staff, warranty and customer service,
workmanship and materials, construction, and price/value (price
was not included as an individual factor). Their findings indicated
that customer service was the second most important factor (after
sales staff) and one of the largest contributors (e.g. 15%) to overall
homeowner satisfaction.
From the builders viewpoint, customer service does not
directly make money for the company (Jahn, 1996). However, it
has a great influence in maintaining home-buyer satisfaction with
their purchase, which will, in turn, increase referral rates and
company reputation (NAHB, 2000). Customers do not evaluate a
service solely on its outcome. They also consider the process of
service delivery (Zeithaml et al., 1990). Service can be delivered
in a variety of ways. In some instances, customers go to a service
providers facility, similar to the construction industry when the
potential home-buyer visits the model homes. Some services are
provided at the customers home, such as any repairs after the
home-buyer move-in. NAHB (2000) suggests that in order to
satisfy home buyers, builders must focus on delivering houses
100% complete, closing on time and providing responsive warranty service.

An overview of home-building quality

and customer satisfaction
According to Shewhart (Evans and Lindsay, 2008), there are two
views to quality, tangible (the actual product and its physical
characteristics) and subjective (customer values and values that
the customer assigns to the product). Traditionally, home builders
assess quality by ensuring conformance to requirements and specifications (Torbica and Stroh, 1999), which is the tangible view of
quality. A critical shortcoming of this approach is that it ignores
the possibility of a mismatch between house specifications and
customer needs.
A more robust view of quality is provided by the customer
satisfaction approach, which places the emphasis upon the customer (Torbica, 1997; Forsythe, 2007, 2008). Using this approach, quality is correlated to the degree in which the product
or service meets customers needs and expectations. Torbicas
research assumed that builders quality practices had an influence on home-buyer satisfaction. According to the customer satisfaction model (Fig. 1), the factors that drive home-buyer
overall satisfaction levels are based on the home builders total
offering, which includes design (e.g. floor plan), house (e.g.
building-material quality) and service (e.g. sales activities). This
adds a new level of difficulty, as customers perceptions and
values shape the level of quality. Quality must ultimately be
evaluated from the customers perception (Davis et al., 1989;
Torbica, 1997; Forsythe, 2007, 2008). Therefore, quality is customer satisfaction. Hence, Torbica and Stroh (2001) found that
out of three components (design, service and quality) the most
important component in shaping overall home-buyer satisfaction
is service.
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I. Nahmens and L.H. Ikuma

Figure 1 Customer satisfaction model (Torbica, 1997).

Customer expectations of service

Customer expectations form the basis for defining quality. Customers have expectations about both the actual service and the
outcomes resulting from the service. Customer expectations are
the value received from a product/service service encounter
(Evans and Lindsay, 2008). Expectations serve as benchmarks to
compare present and future service encounters (Hoffman and
Bateson, 2002). Figure 2 shows the model of customer expectations of service and the forces that influence them. At the centre is
the detailed view of expectations showing two levels, desired and
adequate, and in between the zone of tolerance. Desired service
is the level of service quality a customer actually wants from a
service encounter, whereas adequate service is the level of service
quality a customer is willing to accept (Hoffman and Bateson,
2002). Because of the heterogeneous nature of service, customers
recognize and are willing to accept this variation called the zone of
tolerance (Zeithaml and Bitner, 2000). In the zone of tolerance,
quality levels range from high to low and display the difference
between desired and adequate service.

Customer perception of service

Different people perceive the same thing at the same time in
different ways (Pride and Ferrell, 2006). In this study, perception
of service is a customers unique evaluation of what he/she got
with respect to his/her expectations (not some predetermined
objective criteria of what service should be). Perceptions are
always considered relative to expectations, as will be shown next
through the customer satisfaction gap. Customers perceive services in two terms, quality of service and overall satisfaction with
their experiences. This is different from the perceived service
quality, which is the discrepancy between customer expectations
and perceptions, but it is also a component of overall customer
satisfaction (Zeithaml and Bitner, 2000).

Customer satisfaction gap

The customer satisfaction gap represents the difference between
customer expectations and perceptions. Expectations are the
reference points that customers have coming into a service experience, and perception reflects the service actually received
(Zeithaml and Bitner, 2000). For the purpose of this study,

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I. Nahmens and L.H. Ikuma

Variables influencing home-buyer satisfaction

Explicit service
promises
Enduring service
intensifiers

Personal needs

Transitory service
intensifiers

EXPECTED
SERVICE
Desired
Service
Zone
of
Tolerance

Implicit service
promises

Word of mouth

Past experience

Adequate
Service

Self-perceived
service role

Situational factors

Figure 2 Customers expectations of services model (Zeithaml et al., 1993).

customer satisfaction with service quality is the difference

between expected service and perceived service received. Ideally,
companies will want to close the customer satisfaction gap to
satisfy their customers and build long-term relationships.

Service quality dimensions and

assessment tools
The quality of a firms service could be assessed by measuring
customers perception of quality, where service quality is the
differential between customer expectations and their perceptions
of the actual service received (Berry et al., 1985). In the absence
of objective measures for assessing service quality, Berry, Zeithaml, and Parasuraman developed a multiple-item scale instrument (SERVQUAL) for measuring customer perception of
service quality. SERVQUAL is considered robust in different
environments (Johnston and Barnes, 2008). The purpose of
SERVQUAL is to measure current service quality with diagnostic abilities. It is not predictive. This assessment model was used
in this study with some modifications to reflect the housing
industry domain. This model (Fig. 3) defines service quality as
the discrepancy between home buyers service expectations and
service experienced. Home buyers service expectations are
influenced by past experiences, communication (builders advertisement, brochures, etc.) and personal needs. Service experienced is the actual service home buyers received from their
builders during the entire process of sale through the warranty
period. This model also identifies five dimensions that home

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Customer Gap

Perceived service
alternatives

Predicted Service

PERCEIVED
SERVICE

buyers use to assess service quality and represent the evaluative

criteria of the current study.
To test and quantify the components of this model, the following definitions of each dimension of service quality are provided
(Zeithaml et al., 1990).
Appearance- Visual impression of the service organization:
facilities, equipment and personnel.
Reliability- Consistency of performance and dependability.
Timeliness- Timeliness of service.
Knowledge- Possession of the required skills and knowledge to
perform the service. Ability to inspire trust and confidence.
Empathy- Politeness, respect and friendliness of contact personnel. Individualized attention making the effort to know customers and their needs.

Consumer behaviour in services

Assael (1998) argues that customer demographics, lifestyle and
personality characteristics influence product or service choice.
Demographics influence consumption behaviours both directly
and by impacting other attributes of individuals such as their
personal values and decision styles, which also influence consumption (Hawkins et al., 2001). Demographics influence
whether customers can buy (based on income) and whether they
want to buy (based on factors such as age and household composition). People tend to perceive quality and attributes of products/
services according to their own expectations (Schiffman and
Kanuk, 2000). Zeithaml and Bitner (2000) argue that customers
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Variables influencing home-buyer satisfaction

Past
Experience

Dimensions of SQ:
1.
2.
3.
4.
5.

Communication

I. Nahmens and L.H. Ikuma

Personal
Needs

Customer's
Service
Expectations

Appearance
Reliability
Timeliness
Knowledge
Empathy

Perceived
Service Quality

Customer's
Service
Perception

expectations are as diverse as their demographics, values and

experience.

Research questions
Considering the importance of service quality in homebuyer satisfaction and homebuilders need for a competitive edge in the
current market this study proposes to develop a better understanding of home-buyer perception of service quality, by answering the
following questions:
1 What are the most important service dimensions and their relative importance to different customer groups (i.e. number of occupants, age, gender, price, and household income)?
2 What are home buyers expectations and perceptions of service
along the five service dimensions of appearance, reliability, timeliness, knowledge and empathy?
The survey used in this study included the following homebuyer demographics: age, gender and income. The survey also
included house transaction characteristics such as purchase price,
number of occupants, and house size. These measures were chosen
because of previous findings regarding customers characteristics
and their influence on needs and expectations.

Home-buyer demographics
Age
Customers ages shape the media they use, where they shop, how
they use a product/service and how they think and feel about the
product/service quality level (Hawkins et al., 2001). For example,
Cadillacs research (Assael, 1998) revealed that older and younger
potential customers had different needs and expectations with
respect to a luxury car. As people grow older, they are more
experienced and their expectations of product quality and service
are higher (Assael, 1998).
Gender
After a purchase, buyers evaluate the product to ascertain if its
actual performance meets their expectations. Pride and Ferrell
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Figure 3 A model of home-buyer assessment of service quality (SQ) (Berry et al.,

1985).

discuss that females have higher expectations of post-purchase

follow-through levels than males when purchasing expensive
and high-involvement apparel products (2006). Furthermore they
argue that females tend to transmit opinions and experiences more
than males, which, depending on their experience and levels of
satisfaction can generate referrals. Similarly, Chen-Yu and Hong
(2002) found that more than 85% of dissatisfied females would tell
their friends something unfavourable about their negative experience with the performance of their apparel product.
Income
There is a direct correlation between income level and the purchasing power of a customer. Because marketers tend to allocate
resources by purchasing power, it is not surprising that they
pay more attention to more affluent customers (Assael, 1998).
Hawkins et al. (2001) argues that income is more effective as a
segmentation variable when used in conjunction with other demographics such as age. Gagliano and Hathcote (1994) argue that
income influences the expectations and perceptions regarding reliability and convenience, the higher the income the higher the
expectations of services reliability and convenience. In relation to
the current study, convenience refers to a combination of empathy
and appearance dimensions (e.g. convenient operating hours).

Transaction characteristics
Purchase price
The products purchase price places the buyer in a specific consumer market (i.e. low, medium or high end) with similar needs.
Number of occupants
Household composition and size influence buyers needs and
expectations. For instance, smaller households have led some
companies to introduce kitchen appliances and furnishings in
smaller models (Assael, 1998). Purchasing and consumption patterns are strongly influenced by the family household unit
(Hawkins et al., 2001).

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Variables influencing home-buyer satisfaction

Table 1 Homeowner Service Satisfaction Survey questions

Service attribute (# Questions)
Section

Appearance

1:
1:
2:
3.

4
5
4
5
1
1
Demographics
Gender
Age (6 groups)
Household income (3 groups)
Overall service
would use again
would recommend

Expectations: 7-point Likert-type scales

Experience: 7-point Likert-type scales
Relative importance of attributes (given in %: Total = 100%)
Demographics and purchase characteristics

4: Overall satisfaction: 7-point Likert-type scales

Research methodology
Data collection
The target population for this study were buyers of single-family
houses built during calendar year 2001 in five counties in central
Florida, a region with a population of approximately 2.6 million
(US Census Bureau, 2008). Surveyed houses were new construction and under the builders warranty period during the datacollection time for this study. A random sample of approximately
400 homes was selected from the building permit application
records of various counties in central Florida during 2001. From
this list, 150 of the 400 home buyers were randomly selected to
participate in this study. The data collection started late June 2003
and lasted until August 2003.
The survey was part of a larger study where the houses were
visually inspected through a university research project. To ensure
standardization, the following procedure was used to administer
the survey:
1 University researchers gave the survey to home buyers upon
arrival. Home buyers were informed that the survey was being
used for educational purposes, and the results would not be provided to the home builders.
2 Researchers requested that home-buyers answer every question
so that their opinions and experiences can be fully reflected in the
study findings.
3 While home buyers completed the survey, researchers visually
inspected the home. Surveyed home buyers were given adequate
time and privacy to respond to the survey.
Upon receiving the completed surveys, data for each question
were recorded in a numerical format. Unanswered questions were
excluded from the analysis, which pertained to the blank answer.

Homeowner Service Quality Satisfaction

Survey (HSQS)
The survey used in the current study, called the Homeowner
Service Quality Satisfaction Survey, was a modified version of
SERVQUAL. Before the survey was administered, a draft questionnaire was pretested with 37 new home buyers in central
Florida. The pretesting provided feedback on ease of completion,
identified items that were unclear and allowed estimation of the

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Reliability

Timeliness

Knowledge

4
4
4
4
1
1
Purchase Characteristics:
Purchase price (6 groups)
House size (5 groups)
# occupants (5 groups)

Empathy

Total

5
5
1

22
22
5
6

time required to complete a survey. The survey was revised

based on the outcome of the pre-test. The revision included the
addition of more selections on home-buyer and transaction characteristics related to house size and household income range.
The entire survey required approximately 20 min to complete.
The final version of the survey included four sections with 58
questions as shown in Table 1. Each scaled question (Sections 1
and 4) was rated on a seven-point Likert-type scale, with the
most positive (strongly agree) scoring 7 and the most negative
(strongly disagree) scoring 1. Also note that age group 1 (aged
1824) had no respondents and was omitted from further
analysis.
To quantify the five dimensions of service quality in the homebuilding context, it was necessary to tailor the original definitions
and provide a simple, conceptually sound definition of each
dimension of service quality within the home-building process
(Table 2).

Hypotheses
This is an exploratory study focused on customer satisfaction
with service quality in new home construction. This research
identified and quantified the factors that drive the service quality
dimensions of new home-buyer satisfaction. By understanding
the relative importance to different customer groups, builders
can focus their efforts and set themselves apart from other
home builders. Potential relationships between demographic and
transaction characteristics in other contexts were described previously (see Research Questions), but because of limited information availability regarding influencing factors in consumer
satisfaction in home buying, no directions for the research
hypotheses were assumed. The hypotheses examined were stated
as follows:
Hypothesis 1: Home-buyer expectations of service quality, as
defined by the five dimensions, will not differ by demographic
and transaction characteristic group.
Hypothesis 2: Home-buyer perception of service quality, as
defined by the five dimensions, will not differ by demographic
and transaction characteristic group.
Hypothesis 3: The relative importance of the different service
quality dimensions will not differ by demographic and transaction characteristic group.
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Variables influencing home-buyer satisfaction

I. Nahmens and L.H. Ikuma

Table 2 Service quality dimension definitions (modified from Zeithaml et al., 1990)
Service quality
dimension

Original definition

Tailored definition for home building

Reliability

Visual impression of the service organization: facilities,

equipment and personnel.
Consistency of performance and dependability.

Timeliness

Timeliness of service.

Knowledge

Possession of the required skills and knowledge to perform

the service. Ability to inspire trust and confidence.
Politeness, respect and friendliness of contact personnel.
Individualized attention making the effort to know
customers and their needs.

Visual impression of the home builder: nice brochures,

well-decorated sales office, sales personnel, etc.
Consistency of performance and dependability of the service
before, during and after the home-buying process.
Timeliness of the service before, during and after the
home-buying process.
Appropriate knowledge and skills required to perform the
service before, during and after the home-buying process.
Politeness, respect and friendliness of the sales personnel or
any other builders employee that directly interacts with the
home buyers.

Appearance

Empathy

Hypothesis 4: Overall home-buyer service satisfaction, as it is

related to the gap between home-buyer expectations and perceived service provided by the builder for all dimensions, will
not differ by demographic and transaction characteristic
group.
Hypothesis 5: Home-buyer perceived service quality levels, as
defined by the five dimensions, will not be associated with
home buyers satisfaction with their builder.

Analysis
Home buyers expectations and perception scores from Section 1
of the survey were determined by averaging the expectation and
perception questions respectively for each service dimension.
These scores and the ratings from Section 2 were then analysed
using Kruskal-Wallis tests (a = 0.10). These tests were performed
to identify any significant variation in scores between groups
within each demographic and transaction characteristic variable.
This non-parametric procedure was chosen because of the quasiexperimental design of the study (no control group, no random
assignment to groups). Post hoc tests given by Siegel and Castellan (1988) were used to determine significant pair-wise differences
between specific groups within any demographic or transaction
characteristic variables showing significant differences between
expectations or perception scores. These analyses were used to
address hypotheses 1, 2 and 3.
To confirm the structure of the modified SERVQUAL for use in
the home industry in the Homeowner Service Satisfaction Survey,
a confirmatory factor analysis was conducted using the factor
analysis procedure in SPSS 17.0. Inputs to the analysis were the
22 questions from Section 1, repeated for expectations and experiences, and the three questions on overall satisfaction from
Section 4. The latent factors revealed from the factor analysis were
expected to match the five service dimensions defined for the
Homeowner Service Satisfaction Survey. Loadings greater than
0.50 were used on the varimax-rotated component matrix to
provide optimal separation of variables and to assure the majority
of questions loaded onto one factor only. Eigenvalues greater than
1.0 were considered to indicate significant factors.
Customer satisfaction gap, which is the difference between
expectations and perceptions, was calculated in this study as the
586

difference in expectation scores and perception scores in Section 1

of the survey for corresponding questions. As with the previous
factors, customer satisfaction gap was analysed using KruskalWallis tests (a = 0.10) and appropriate post hoc tests where
needed. This analysis addressed Hypothesis 4.
To address Hypothesis 5, Pearson correlation coefficients were
calculated between customers overall satisfaction as rated in
Section 4 of the survey and the product of the customer satisfaction gap and relative importance ratings. The main purpose of this
analysis was to identify the magnitude and orientation of the
relationship among service quality dimensions and overall homebuyer satisfaction. This analysis identified the key drivers of
service quality.

Findings and discussion

Analysing the demographics from Section 3 of the survey revealed
that most of the home buyers surveyed were between 35 to 44
years old with roughly the same number of males (47%) and
females (53%). The median annual household income was
between $60 000$70 000, which is higher than the estimated
median household income for Florida in 20032004 of $41 624
(US Census Bureau, 2006) (t-test revealed a significant difference
at P < 0.0001). Because this estimate included households that
were financially unable to purchase a home, the median income of
home buyers was expected to be higher. According to the 1999 US
Bureau of the Census, the largest income band of households in
Florida is $50 000$75 000, and the largest age group within that
income band is 3544 (Baer, 2003). Therefore, the median income
of the survey respondents appears to be representative of the
population distribution of home buyers in Florida. The transaction
characteristics questions showed that over half of the houses in the
survey were purchased for $200 000 or less which is comparable
to the sales price median for 2003 reported by the Orlando
Regional Realtor Association (2004) of approximately $150 000
(the data include a metro area of three of the five counties included
in the current survey). The house size of most homes sampled was
232 m2 or less. Most of the houses surveyed had two or more
occupants, with only 3% single occupants. In all cases, the respondent from households of two or more occupants was a head of
household (male or female) and was the home buyer, given that the

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I. Nahmens and L.H. Ikuma

Table 3 Home buyers service quality expectations, perception, and importance scores

Variables influencing home-buyer satisfaction

Service
dimensions

Expectation
mean (SD)

Perception
mean (SD)

Relative importance
mean (SD)

Appearance
Reliability
Timeliness
Knowledge
Empathy

5.8
6.7
6.5
6.9
6.5

5.6
4.6
4.7
5.3
5.5

18%
28%
19%
18%
17%

survey was completed during the home inspection. The averages

and standard deviations for scores on the five dimensions in terms
of expectations, perceptions, and importance are provided in
Table 3.
Section 4 of the survey showed that home buyers rating of
current service satisfaction averaged 5.07 (SD 1.77) on a scale of
1 (very dissatisfied) to 7 (very satisfied). About 72% of respondents reported satisfaction (5 or higher) with the services they
received. About one-fifth (21%) of the home buyers were dissatisfied with their builders services, while 7% were neither satisfied
nor dissatisfied. Furthermore, at least one of the subgroups on age
(P = 0.046) differed regarding their rating of service satisfaction.
Home buyers rating of overall satisfaction averaged 4.86 (SD
2.14). While more than half (64%) of home buyers were satisfied
with their builders, 26% were not satisfied, and 10% were neither
satisfied nor dissatisfied. About 64% of home buyers would recommend their builder to a friend or relative wanting to buy a
house.
The factor analysis revealed nine significant factors with eigenvalues greater than 1.0. These nine factors explained 72.82% of
the variance in survey responses. However, only the first seven
factors had more than one question with a loading factor greater
than 0.50, and these factors explained 67.34% of variance. The
factor analysis indicated that the 22 questions in Section 1 on
homeowner expectations largely fell into the same categories as
originally designed in the SERVQUAL. The four questions for
appearance loaded onto one factor as did the four questions for
timeliness. Four questions from the reliability questions loaded
onto two factors, and the fifth question in that category loaded onto
the factor depicting timeliness questions. Six of nine questions
from the knowledge and empathy categories loaded onto the same
factor, and the remaining three items loaded onto the timeliness
or appearance factor or on a single-item factor. Questions 24 of
the experience questions from Section 1 loaded onto one factor
(appearance), but questions 522 and the three overall satisfaction
questions all loaded onto one factor, which explained the largest
portion of response variance (33.15%). The first question from the
experience category did not load onto any factor.

Hypothesis 1: Home-buyer expectations of

service quality, as defined by the five
dimensions, will not differ by demographic and
transaction characteristic group
Section 1 of the survey, focusing on customer expectations and
perceptions of service quality, showed that expectations of appearance were influenced by purchase price (P = 0.059) and square
footage (P = 0.025). Home buyers expectations did not seem to

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(1.0)
(0.4)
(0.6)
(1.5)
(0.6)

(1.1)
(1.7)
(1.7)
(1.5)
(1.4)

(11.2)
(14.1)
(7.6)
(7.6)
(7.8)

differ across gender, age, household income, or number of occupants. Post hoc tests revealed that home buyers purchasing less
expensive homes (group 2) had significantly higher expectations
for appearance than those purchasing more expensive homes
(group 4). This decreasing trend in appearance expectations held
true except for the least expensive group of homes, which had
lower appearance expectations than group 2. In terms of square
footage, home buyers in a smaller home category (group 2) had
higher expectations for appearance than all of the larger home
categories (significantly higher than group 4).
Expectations for reliability and empathy also differed significantly across different home sizes (square footage, P = 0.008 and
P = 0.043 respectively). Home buyers purchasing the smallest
sized homes (group 1) had significantly higher expectations for
reliability than the two largest-sized groups of homes (groups 4
and 5). Buyers of larger homes (group 5) had significantly lower
expectations for empathy than all other groups of smaller-sized
homes. The highest level of expectations for empathy occurred in
group 2, which was significantly higher than empathy expectation
of the smallest sized home group (group 1).

Hypothesis 2: Home-buyer perception of

service quality, as defined by the five
dimensions, will not differ by demographic and
transaction characteristic group
Section 1 of the survey revealed that differences in perceptions
were significant between age groups and number of occupants.
Significant differences between age groups were found for all five
components of service quality (P-values from 0.003 to 0.019),
with the oldest group having significantly higher perceptions of all
five dimensions than the four younger groups.
Perceptions of appearance and empathy were significantly different among different household sizes (number of occupants,
P = 0.050 and P = 0.046 respectively). No specific pairs were significantly different in their perceptions of appearance, although the
highest levels occurred for households with two or five people.
Single occupants had significantly lower perceptions of empathy
than the other four household sizes, and larger households of five
people had significantly higher perceptions of empathy than
households with three or four people.

Hypothesis 3: The relative importance of the

different service quality dimensions will not
differ by demographic and transaction
characteristic group
Section 2 of the survey, which focused on the relative importance
of the five dimensions of service quality, showed that differences
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in purchase price, square footage and household income had significant effects on ratings. Differences in purchase price significantly affected importance ratings of appearance (P = 0.027)
and reliability (P = 0.001), although these two dimensions did
not follow the same trends. The lowest price group placed significantly higher importance on appearance than the highest price
group, but the three highest price groups placed higher importance
on reliability than the lower price groups (group 1 significantly
lower than groups 4 and 6, and group 3 significantly lower than
group 4). Differences in square footage also significantly affected
reliability ratings (P = 0.014), with the general trend showing
buyers of larger houses placing more importance on reliability
than those purchasing smaller homes (group 2 was significantly
lower than group 3).
Differences in household income significantly affected importance ratings for all five dimensions of service quality (P-values
from 0.001 to 0.076). Lower income buyers placed significantly
higher importance on appearance than higher-income buyers,
while higher-income buyers placed significantly higher importance on reliability than lower-income buyers. While the remaining three dimensions (timeliness, knowledge and empathy)
showed significant differences in income overall, no general trend
could be interpreted.

Hypothesis 4: Overall home-buyer service

satisfaction, as it is related to the gap
between home-buyer expectations and
perceived service provided by the builder for
all dimensions, will not differ by demographic
and transaction characteristic group
The gap score was calculated by subtracting the expectation scores
and perception scores in Section 1 of the survey for corresponding
questions. If the gap score is negative there is a need for action
because customers are dissatisfied (perceptions did not meet
expectations). Results revealed that age made a significant difference in service satisfaction, as measured by the gap between
expectations and perceptions, for reliability (P = 0.024) and
knowledge (P = 0.002). Middle-aged buyers (group 3) had significantly negative gaps in reliability than older buyers (group 6).
Middle-aged buyers in groups 3 and 4 had significantly negative
gaps in knowledge than the two older groups (5 and 6).
Significant negative gaps between expectations and perceptions
of appearance and reliability were also found for different purchase price groupings (P = 0.055 and 0.015 respectively). The
least expensive homes in group 1 had significantly larger negative
gaps in appearance than the most expensive homes in group 6.
Less expensive homes (group 2) had significantly larger negative
gaps in reliability than more expensive homes (groups 4 and 5).

I. Nahmens and L.H. Ikuma

these dimensions also had a linear relationship with the overall

service satisfaction. Therefore, all five service dimensions influenced overall satisfaction ratings.
Overall, the first four null hypotheses can be rejected at a = 0.10
for at least one demographic or transaction characteristic variable.
The alternate hypothesis can be accepted that home-buyer expectations and perceptions of service quality, relative importance
of the five service dimensions, and overall satisfaction will be
affected by demographics and transaction characteristics. Furthermore, hypothesis 5 can be rejected at a = 0.10, and the alternate
hypothesis that perceived quality is associated with home-buyer
satisfaction can be accepted for all five service dimensions.

Discussion
In rating the relative importance of the five different service
quality dimensions, home buyers rated reliability as the most
important service quality dimension, followed by timeliness,
knowledge, appearance and empathy. This is consistent with
earlier studies that found that reliability was the most important
determinant of service quality among US customers for all consumer products and services (Zeithaml and Bitner, 2000). Note
that reliability ranked very high in home-buyer expectations,
second only to knowledge and that reliability was perceived to be
the area where builder performance was worst. Furthermore,
expectations, perceptions and relative importance of reliability
were significantly influenced by several factors including age,
purchase price, house size and income. This means that while
reliability is most important in service quality, it also has the most
variation between demographics and transaction characteristics,
making it an important component to study in depth in future
research.
Study findings indicate that different subgroups within gender
and number of occupants did not have different service expectations nor did they rate the importance of each of the service
dimensions differently. However, given Pride and Ferrells (2006)
arguments that females may be able to generate more referrals by
sharing opinions and experiences, home builders should not ignore
the need to maintain high satisfaction among female customers.
Also, while age and number of occupants did not influence expectations and relative importance ratings, both variables did show
significant differences in perceptions of the five dimensions of
quality. Other home-buyer demographics and transaction characteristics appear to have a significant effect on quality expectations
and the relative importance within each service dimension. Therefore, all demographic and transaction characteristic variables considered in this study contribute to overall customer satisfaction
with service quality.

Income
Hypothesis 5: Home-buyer perceived service
quality levels, as defined by the five
dimensions, will not be associated with home
buyers satisfaction with their builder
Results from the Pearson correlation test revealed that all service
dimensions: appearance (r = 0.330), reliability (r = 0.660), timeliness (r = 0.679), knowledge (r = 0.515) and empathy (r = 0.679)
were significantly correlated to overall service satisfaction, and
588

Home buyers rated importance of empathy appears to vary

according to the level of income. Low-income home buyers placed
higher importance on empathy than those with high income. One
can speculate that lower income home buyers may feel greater
emotional attachment to the purchase of a home, particularly if
this is the first home purchase or first large purchase. On the other
hand, buyers with higher incomes may be moving to a larger home
and have already gone through the experience of buying a house.

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I. Nahmens and L.H. Ikuma

Reliability was rated to be more important to higher income

home buyers. The reasons for this trend are not clear, but perhaps
higher income home buyers place more importance on dimensions
of quality that affect their home long term rather than dimensions
that have less influence on the actual home such as appearance
(e.g. nice brochures, well-decorated sales office, etc.). These findings are consistent with more general service quality research
results (Gagliano and Hathcote, 1994).

Purchase price
Home-buyer expectations and rated importance of appearance
appears to vary with respect to the purchased price of the house.
Owners of lower priced houses had higher appearance expectations and considered it to be more important than those with higher
priced houses. A possible reason for this finding is that those home
buyers might relate better to the more tangible aspect of service,
implying that the appearance of the sales personnel or the advertising brochure represents the future quality of their house. Consistent with the income results discussed earlier, home buyers that
purchased more expensive houses placed more importance on
reliability.

House size
Home buyers expectations and rated importance of empathy
appear to vary with respect to the size of the house, with home
buyers of smaller houses having greater expectations for empathy
than those in larger homes. Home buyers of small houses appeared
to have higher expectations regarding appearance than those with
larger houses.
Although home buyers of larger houses rated reliability importance high, results from the survey revealed that they had lower
expectations of reliability than home buyers of smaller houses. A
possible reason for this apparent contradiction may be that square
footage is not a true root transaction characteristic for differentiating home-buyer expectations of service quality, given that house
size is dependent on local markets.

Limitations and future research

The factor analysis largely confirmed the structure of the 22 questions from the expectations section of the Homeowner Service
Satisfaction Survey to match the pre-defined service dimensions.
The one exception was the tendency of responses to be similar for
knowledge and empathy expectations. The questions that loaded
onto the mixed-category factor do contain similar words such as
secure, instill confidence, friendly and respectful that would
indicate a positive personal relationship with the home builder
rather than distinguishing knowledge from empathy.
With the exception of the appearance category, all questions
from the experience and overall satisfaction dimensions loaded
onto one factor. This may indicate that home buyers consider all
aspects of their experience as one factor, or overall satisfaction,
rather than distinguishing reliability, timeliness, knowledge
and empathy. There is also the possibility that the original
SERVQUAL was not an appropriate instrument to measure different aspects of experiences specific to consumers in the homebuilding industry. Hence, the service dimensions might be

International Journal of Consumer Studies 33 (2009) 581590 The Authors

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Variables influencing home-buyer satisfaction

different in the home-building context. This difference in service

dimensions has been found in other studies of service in different
industries. For instance, a study of the healthcare industry found
only four service dimensions (timeliness, empathy, reliability and
knowledge) to be relevant (Wang et al., 2007).
Another limitation of the study was the use of nonparametric
analysis, which limited the ability to test for interactions among
the demographic and transaction characteristic variables. These
interactions could possibly affect perceptions of service quality
and should be investigated in future studies.
The initial research findings that emerged from this study are
helpful in dissecting customer satisfaction needs according to
demographics and transaction characteristics, but further research
remains to be done. A review of this study suggests several directions of future research. First, future studies could compare customers expectations and perceptions over time by grouping
different stages in the building process. Results from this research
can be enhanced with a longitudinal study that would follow the
home buyers perceptions and opinions through the building cycle
and ownership process. Second, this study should be replicated in
different settings including different geographical locations to
attain nationwide and international validity and different types of
homes (existing homes, multi-family units, etc.) Third, the customer satisfaction model used in this study included builders communications as an external factor that influence home buyers
expectations. A future study could include builders customer satisfaction practices. Fourth, additional items may be considered as
applicable to the demographics used such as marital status, ethnicity, education, occupation, religion, etc.

Conclusions
The findings of this research add to the understanding of home
buyer perception of service quality across demographics and
transaction characteristics. Variables such as purchase price, house
size, and household income influence expectations and perception
of service. Thus, it could be recommended that builders apply
particular focus on their efforts to assure high service quality on
those service dimensions that are most important for each home
buyer (i.e. reliability, timeliness and knowledge) in order to be
more effective in improving satisfaction. Yet this does not imply
that the other service dimensions be neglected as it was shown
that home-buyer overall service satisfaction is driven by all five
dimensions of service quality: appearance, reliability, timeliness,
knowledge and empathy. Together with the previous findings on
specific home buyers needs, one could suggest that by addressing
those particular needs, builders could more effectively reduce
the expectancy-perceived service gap and increase customer
satisfaction.

Acknowledgements
This study was performed with the assistance of the Orlando
Sentinel, WESH (the local NBC television affiliate), and of home
buyers.

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