Baron Briefs

We are releasing a new WordPress plug-in soon which will allow WP bloggers to host a real estate Q&A in the sidebar of their blog.  The questions are “crowdsourced” from participating web sites and pooled together to create a network of questions.  The answers to the questions are provided by local real estate agents and moderated by RealtyBaron.

The plug-in offers three distinct value propositions for publishers:

1. Free – no cost to download, install, and/or use the plug-in
2. Revenue – a new source of revenue from advertising embedded in answers.  Ad impression, click tracking, and payment collection is handled by RealtyBaron
3. Search Engine Optimization (SEO) – When a blog sources a question, the blog earns a “clean” link back to the blog from all web sites publishing that question.  Plus, there is potentially thousands of new pages of free, relevant content for search engines to index on the blog’s site.

We’re making a development copy of the plug-in available today to get some early feedback:

Download RealAnswers WP Plug-in 1.0

Update: Download from WordPress Plug-in Directory

Let us know what you think!

In a continued effort to elevate the great agents, we’ve added links to AgentRank.com profiles from our home search results:  

These spots are not paid advertising.  The three available spots are awarded to agents based on their AgentRank™. In other words, it’s free advertising for REALTORS who are able to climb into a top spot on AgentRank.com.  If you haven’t already signed up for a FREE RealtyBaron account yet, do it now.  Good luck!

Earlier this morning, I approved a ListingHedge™ for 3605 HAMMERKOP DRIVE in NORTH LAS VEGAS, NV making it the world’s first risk-free listing ever. OK, not entirely true since a ListingHedge™ is purchased and settled with BaronBucks during the beta period, but still a monumental moment. Here’s the breakdown:

If home sells….

+ $5,423 Est. Commission Side
- $2,000 Expenses
- $458 Cost of Hedge
= $2,965 Net Earning

If listing expires…

+ $0 Est. Commission Side
- $2,000 Expenses
- $458 Cost of Hedge
+ $5,500 Hedge Payout
= $3,042 Net Earnings

Today is the public beta launch of RealtyBaron.com’s latest and greatest, a risk management product for real estate agents called ListingHedge™. As the name implies, a ListingHedge™ allows an agent to hedge a listing. Put simply, a ListingHedge™ is used to reduce the financial risk agents accept when spending time and money upfront in exchange for a commission after a home sells. Traditionally, agents do not recover expenditures from an unsold listing. With a ListingHedge™ in place, however, an agent is still paid for work that does not result in a sales commission. The illustration below compares the traditional risk model to this new hedged risk model:

During the beta period, a ListingHedge™ is purchased and settled with BaronBucks™. Any broker or agent with a RealtyBaron.com account is automatically credited with $5,000 BaronBucks™ that can be used to purchase a ListingHedge™ for each listing the broker or agent is marketing.

After the beta period ends and the service officially launches, a ListingHedge™ will be purchased and settled with real money. BaronBucks™ accumulated by agents during the beta period will be converted to equity shares in (pre-IPO?) RealtyBaron, Inc.

To get started, follow these steps:

1. Log in or sign up at http://www.realtybaron.com/agent
2. Complete your AgentRank™
3. Upload your current listings
4. Hedge your current listings

Question, comments, or concerns? Add a reply below and I’ll respond.

This morning, RealtyBaron began posting AgentRank™ activity to the popular micro-blogging platform, Twitter. Specifically, an agent’s sale transactions, client reviews, market forecasts, and new ranking value is posted when captured by the system. You can subscribe to system-wide activity by following AgentRank™ on Twitter.

More importantly, however, agents can “tweet” their own AgentRank™ activity to their “tweeple” by providing their Twitter account credentials.

Twitter is only the beginning. I plan to add other notable social arenas as time permits. If you’d like to request a specific platform, please let me know.

Imagine your parents are retiring, moving to Florida, and have asked you for help with “meeting a nice Realtor®” in Naples. Unlike the client referral I sketched in scenario #1, this referral is very personal. A referral fee is your least concern. Your parents are aging and they need to be handled by the best. However, you don’t have contacts in or near Naples, Florida. Here’s how a ReferralAuction™ can help:

#1 – Like I said above, a referral fee is your least concern. Therefore, all three bids—opening, reserve, and stop—remain at 0%. Basically, the first agent who meets the minimum required AgentRank™ gets your parents’ business.

#2 – But submitting a bid in this scenario is easier said than done. The minimum AgentRank™ in this case is 10—the highest ranking available—which means unless an agent has an impeccable sales history and glowing client reviews, he or she will be unable to bid for your referral.

Any questions?

Imagine you have a client who is moving to Dallas. You have the listing in California but the client has not yet made a connection with a buyer’s agent. The client asks for a referral, but you don’t have any contacts in Dallas. You want to ensure your client is handled properly, but you also want to fully monetize a client referral that will almost certainly result in a sale for the buyer agent. A ReferralAuction™ can help you achieve both objectives. Here’s the play call:

#1 – The auction opens bidding at 0%, but the “Reserve Bid” ensures a bid of 20% is received before the client’s contact information is revealed to a buyer’s agent. If the auction ends with a bid less than 20%, your identity and that of your client remains hidden from any potential buyer’s agent.

#2 – Assuming the “Reserve Bid” is satisfied, the “Stop Bid” ensures bidding doesn’t exceed your idea of “fair value”. When bidding reaches the “Stop Bid” amount, the referral auction immediately closes and the referral is awarded to the highest bidder.

#3 – The “Minimum AgentRank™” guarantees bidding is available only to agents who have a proven history of closing sales and pleasing clients. In the scenario above, only agents with a ranking of 8 or above are allowed to bid for your client referral.

Any questions?

….as I outlined almost two years ago in our discussion group:

1. Agents/Brokers can leverage our ZIP code notification system to instantly alert agents of an available referral and don’t need to seek out individuals on the Web/mailing lists.
2. Agents/Brokers can leverage AgentRank(TM) to ensure they are handing the referral off to an agent/broker with a proven track record.
3. Agents/Brokers can maximize their potential referral fee by leveraging the auction platform.
4. Agents/Brokers can utilize our feedback system to rate brokers/agents who both offer and accept referrals. Similar to eBay, a feedback system can be nice leverage to keep both parties of a referral transaction honest.

Today, we’re expanding our patent-pending auction platform to include business referrals among Realtors®. The new product, ReferralAuction™, allows real estate brokers and agents to efficiently find and qualify out-of-town agents to handle their referrals.

As a Realtor®, you likely already swap referrals both on-line and off. However, when referring your client to an agent whom you’ve never met, two questions remain:

1. Is the agent qualified to handle the referral?
2. Will the agent pay my referral fee if a deal is done?

A ReferralAuction™ uses the AgentRank™ algorithm to ensure a referral is awarded to an agent who has a proven track record to make a sale.

Both the referral source and recipient have the opportunity to review the performance of each to discourage deceitful behavior.

… from 6 to 7%. Can i do better?” – a Baron Briefs reader

Your current Realtor is likely offsetting the additional costs she incurs in marketing expenditures and overall risk as homes sit on the market unsold. If you want to keep her as your Realtor, here are some suggestions for getting her back down to 6%:

1. Consider passing on expensive services that rarely sell homes such as newspaper advertisements and open houses
2. Offer a “tiered” commission. For example, at $200,000, agree she’ll be paid 6% on any dollar up to $200,000 and paid 10% on any dollar above $200,000.
3. If you’re moving within the same local market, ask her to represent you on your purchase, too. Typically, Realtors will reduce their commission by up to 33% if they have a hand in both transactions.
4. And finally, if all else fails, we obviously recommend using our own service to help find the most competitive sales commission in your area.

Anyone have additional tips?