Editor’s Note: The Disruptor Roundup analyzes companies implementing unconventional models.
This isn’t your average brokerage. At first glance, the platform is a home-search tool much like other portals; however, Padx is, in fact, a licensed brokerage that contracts agents and also services consumers through full real estate transactions. Concerns? Padx is still new and currently has many limitations.
The company, which launched at the beginning of October, is currently based in six counties in California, but has future plans for a national rollout. Aligning more with today’s idea of a brokerage, the Padx platform and experience takes place entirely online, with the exception of home showings.
The biggest benefit to consumers?
A lifestyle-based home search allows consumers to search for properties based on five locations important to them, such as proximity to work, the gym, their children’s school, a family member’s home, etc., and other lifestyle options. While Padx asserts its proprietary algorithm can pull property results that meet these criteria, the capability is currently in testing and cannot be verified—a firm launch date has not been provided. Within the platform, buyers can currently search for properties based on more traditional factors such as price, square footage, number of bedrooms and baths, etc.
Its biggest claim?
Providing a solution to the fragmented nature of traditional real estate with a streamlined experience. Rather than having to use individual sources to complete the home search, the agent search and the overall home-buying or -selling process, consumers can do all three through Padx’s centralized transaction hub. Once buyers find a home, they can request a showing and then put in an offer online.
A bonus for consumer pockets? Padx guarantees to reimburse buyers and sellers for 50 percent of the buy-side and list-side commission, respectively, upon closing—a discount that does not impact agents’ salaries, says Padx. The company will reportedly be selling exclusive Padx listings on their site and mobile applications in the future. At press time, however, only MLS-drawn listings were available on the site.
Where do real estate agents fit in?
“The goal of the company is not to displace the role of the real estate agent, but to partner and provide an alternative revenue stream for consulting agents,” said Joshua Hinkson, co-founder and COO of Padx, in a statement.
Padx hires two types of agents: field agents and in-house agents. Field agents can have another brokerage hold their license and simply meet with buyers who schedule home showings through the company’s website, and answer market- and property-related questions. They receive a flat fee for their services. In-house agents, however, hang their license with Padx, are salaried employees and play a more involved role, helping in negotiations, managing escrow and providing a high-quality customer experience. These agents are supported by a team of transaction coordinators, and are also eligible to receive bonuses based on transaction volume and customer feedback.
There are potential downsides, however. Consumers are not contracted with these agents; instead, agents are there in a support role. In addition, with Padx, consumers cannot choose their own agents—they are matched with buyers and sellers based on Padx’s algorithm, which considers agent availability, geo-location and local knowledge. For a company that prioritizes consumers’ lifestyles, this could be counterintuitive, as it does not take into account matches based on personality and core values—factors that are typically considered when consumers interview and select their own agents.
Additionally, the Padx system does not require buyers to engage with agents on a deeper level, meaning they could go through an entire real estate transaction with minimal agent involvement. The upside? Consumers can request a more involved agent presence—an experience that could be helpful for first-time buyers, who do not have the prior experience of going through a real estate transaction.