Lesswing, LLC

Concerning Digital Assets

The Square Deal and Fair Compensation

At the turn of the century, Theodore Roosevelt introduced a domestic policy known as the Square Deal, which emphasized

“substantial equality of opportunity and of reward for equally good service.”

Theodore Roosevelt, “The New Nationalism,” in The New Nationalism (New York: The Outlook Company, 1910), 3-34.

Over the past decade, service providers in most industries, including real estate, have reduced information distribution costs while improving reliability. The recent focus on commissions is a continuing pressure point on the Square Deal. Consumers will continue to look for “deals” but there comes a point when the traditional way to cut costs has diminishing returns. We can only dim the lights so far with the current switches.

The listing broker is on the front line of the consumer relationship. They may not have the first contact, but their commissions support the various industry services and groups. When the customer is happy, business thrives. If commissions continue to decline, there will need to be a round of efficiency forced on the industry. It can’t continue to be prudent to ignore lower cost alternatives.

Pay-as-you-go (or on-demand) models match the cyclical ups and downs of the real estate business but are not as popular as subscription services. The reality is that it has not been practical to invest in pay-as-you-go systems because of undependable revenue streams. Service providers often have vendor agreements that are based on set charges whether the system is fully used or not. The industry would appear to be stuck.

Luckily, modern systems support pay-as-you-go models. What is being paid for is access to information. An approach similar to background safety checks can be used for real estate information. You can immediately see that there is potentially important agent safety information, but need to pay a small fee to access more details. Real-time systems are a good fit for pay-as-you-go models.

Today, listing information is widely available to consumers. In a pay-as-you-go model, these summaries would remain free. Asking for more details requires work and there should be just compensation for these efforts. Consumers may not be interested in more details, but other professionals would be. Business rules still need to be applied so there is a need to preserve current expertise in this area, even if the tools are different.

The concepts of the Square Deal can be applied to a shift away from annual fees and towards on-demand pricing. The shift has challenges that include changing tools, practices and attitudes. In the end, the consumer still drives change and efficiency could be a good way to address the pressures on the industry.

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