Introducing the ListingHedge(TM)
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:
- Log in or sign up at http://www.realtybaron.com/agent
- Complete your AgentRank™
- Upload your current listings
- Hedge your current listings
Question, comments, or concerns? Add a reply below and I’ll respond.
Tags: hedging, insurance, realestate, realtor, risk
September 3rd, 2008 at 11:23 am
Marc -
I recommend having your lawyer review the plan to disperse equity to Beta participants. I’ve been involved in a few projects that considered similar solutions for rewarding crowd-sourced involvement. It’s always turned out to be dangerous ground and it may not be legally possible depending on how many people participate and how the company is structured. My understanding is that there’s a limit to the number of people that can hold common stock of a private company.
September 3rd, 2008 at 11:37 am
Thanks, David. Very sound advice. Rest assured, I wouldn’t proceed to the next step without one or more attorneys reviewing it.
Currently, no common stock is being distributed and will not be distributed until RealtyBaron, Inc becomes a public company. Until then, we are tracking BaronBucks using an internal accounting system.
September 16th, 2008 at 6:55 am
[…] Realtybaron.com launches a “hedging” service for real estate agents. You can still get paid for work that does not result in a sales […]