Introducing the Decentre Property Exchange
In my previous post about the potential effects of the commission lawsuits against NAR and four major corporations, I mentioned a potential conflict of interest, as I have been working on an auction-related initiative. I had kept this initiative relatively quiet, but due to recent developments in the court case, I believe it’s necessary to share some information about it for transparency.
Allow me to introduce Decentre Property Exchange (DPX). While I will strive to provide this information without turning it into a sales pitch, I can’t guarantee that I won’t sound a bit promotional, as DPX has been my passion for over a year.
Decentre Property Exchange (DPX) is an online marketplace for real estate. In any buying or selling transaction, three essential processes occur:
1. Execution: The buyer agrees to buy, and the seller agrees to sell.
2. Clearing: All necessary steps for settlement, including negotiations and quality verification.
3. Settlement: The actual exchange of money or valuable assets for the purchased item.
In real estate, the execution phase involves the signing of a Sales Contract, signifying the agreement to buy and sell the property. The clearing phase encompasses the contract-to-close process, where various details are verified, negotiations take place, and everything is prepared for the closing. The settlement phase involves the actual transfer of money and property, including document signing and key exchange.
At DPX, we believe in using open auctions to match buyers with sellers. While the reasons for this choice are complex and detailed, we firmly believe that open auctions offer transparency, higher property prices, efficiency, faster transactions, and, most importantly, an improved consumer experience.
DPX brings several unique features to the table that set it apart:
1. DPX is a Multiple Listing Service (MLS). This distinguishes it from traditional MLS systems, which are built around the offer-and-acceptance model and often pose challenges for conducting auctions. Our solution is to create a complementary MLS designed specifically for the auction process.
2. DPX does not charge commissions to sellers. Instead, it implements a Buyer Premium, typically set at the prevailing commission rate in the market (around 5%). This Buyer Premium is split between the listing broker/agent and the buyer broker/agent, ensuring compensation without unilateral offers of compensation.
3. Joining DPX is entirely free, with no application fees or complex forms. It’s not intended to replace your local MLS but to serve as a parallel platform, offering additional options without additional costs.
Furthermore, DPX provides a solution to the buyer commission issue that has arisen due to the commission lawsuits. Buyer agents don’t need to discuss compensation with buyers, as DPX handles the compensation transparently.
To address concerns about buyers paying extra, DPX ensures that the Buyer Premium is fully financeable and adds no additional burden to buyers. The platform’s unique features, combined with its adherence to regulations and data compliance, provide a legal and viable solution.
In conclusion, as the real estate industry faces potential changes in compensation models and commission-related regulatory actions, DPX offers an innovative approach to address these challenges. Its business model can help brokerages navigate potential disruptions and ensure agents’ compensation without the issues currently associated with the MLS system.