New auction marketplace puts a twist on how agents get paid
Real estate consultant Rob Hahn is introducing a marketplace auction website that allows homeowners to sell without paying commissions.
- DecentrePX is a non-exclusive multiple listing service and auction marketplace.
- Buyers who purchase a home through the auction site will pay a premium that covers the listing broker and buyer broker fees.
- The buyer-funded compensation model comes at a time when lawsuits could alter how agents get paid.
A new marketplace auction website turns the established broker-agent compensation model on its head by having buyers pay instead of sellers.
Consultant Rob Hahn recently launched DecentrePX, an online auction marketplace which is currently in a testing mode, serving the Phoenix area. The plan is to expand into other markets in the coming months.
The website will function as a multiple listing service, allowing agents to put a home up for auction even while they have it listed on other MLS sites. It also will allow homeowners to sell without having to pay a commission.
Instead, DPX will charge the winning bidder a buyer premium, which is split between the listing broker/agent and the buyer broker/agent. Agents using DPX agree to waive all commission claims if they are paid through DPX, Hahn said.
This could be a new option for agents as the industry deals with the Moehrl vs. NAR class-action lawsuit surrounding how buyer agents get compensated. Hahn started DPX with the goal of protecting buyer compensation, but said it might also be a way to help brokers avoid liability.
"I think the timing is super interesting because of what's happening in the legal and regulatory arena," said Hahn, a real estate consultant who also runs the Notorious ROB website. "I do think that people are going to very quickly realize that we might be something they need to explore. We're just an option but we think this will become the norm."
Auction sites for non-distressed properties have been tried before, without much success. Hahn is taking a different approach that he believes could work better. First, he is establishing it as a separate MLS in order to have fewer rules and a streamlined process. The second important function is providing compensation through a buyer premium.
There might be some pushback from buyers getting a premium tacked on to pay buyer and seller agents, Hahn admits.
But as he sees it, "the buyer is the person who is paying the commission today." They just do it indirectly, by paying the seller, who then pays the commissions.
Hahn believes buyers will come to see the premium as an acceptable price to pay for simplicity and transparency. "Once agents understand that [financing] piece, then this is all upside and no downside for their buyer client. It's not like they are paying any more than they would under today's environment."
As an MLS, Hahn said there are currently minimal rules in place and no board. He's relying more on learning what the agents want as they sign up, and leveraging technology to evolve DPX as it grows.
While it is still in a testing mode, Hahn said there's been a deluge of inquiries from agents in other markets interested in the concept. He noted that auctions are much more common in other countries, while the U.S. has used the auction model mostly for distressed property like foreclosures and REOs.
"Whenever I talk to people outside of real estate, this makes all the sense in the world," Hahn said. "It's a matter of agents going out and talking to consumers and seeing what they say. It's a pretty powerful value proposition. In a way that's the test we are most interested in seeing."