A new company called “REX” is attempting to disrupt the real estate industry, and perhaps more importantly, displace the real estate agent. Or possibly even put them out of business for good.
The message is clear – real estate agents make large commissions and may not have your best interests in mind. Instead, REX argues that agents will do what is in their best interest to get paid and move on to the next buyer or seller.
Buyer’s Agents Only Find a Third of Homes That Are Purchased
- According to REX
- Only a third of homes are found by a buyer’s agent
- So why are they still getting paid the big bucks?
- Of course it goes beyond just finding and touring properties
And with the advent of websites like Redfin and Zillow, why are real estate agents still earning 6% of the sales price? Shouldn’t it have come down if only “30% of homes purchased are found by buyer’s agents.”
I’m not sure where REX got that statistic from but I don’t doubt it…these days most prospective home buyers do a lot of their own research using those aforementioned websites and tell their agent which homes they’d like to view.
The agent still has to coordinate showings if the property isn’t hosting an open house, speak with listing agents, determine an asking price, and help complete necessary paperwork.
But let’s be honest – a decent chunk of the process is now in the hands of home buyers.
Should You Use REX and Ditch Your Real Estate Agent?
- REX is a real estate brokerage
- But a discount one that only charges 2%
- And they can save you money on the buy-side
- If they bypass the MLS
First off, it should be noted that REX is a licensed real estate brokerage. But instead of the traditional two-agent model that consists of a buyer’s agent and listing agent, they simply offer a concierge service that handles all the details.
This concierge service is an actual licensed real estate agent that works on your behalf to facilitate the transaction whether you’re a buyer or a seller. So if you use REX you still get the same level of service a typical real estate broker would give you. It’s not like selling your home yourself (FSBO).
And because the homes don’t appear on the MLS, instead of charging 5-6% commission, you are only charged a 1% fee to list your home. This appears to have increased to 2% now.
This means the seller keeps more of their money and the property can be listed more aggressively to a buyer on the rexchange.com.
Where Is REX Available?
REX originally launched in three Southern California counties, including Los Angeles, Orange, and Ventura.
Now it’s also available in the counties of Riverside and San Diego, Northern California (Bay Area), New York (Brooklyn, Queens, and Long Island), Texas (Austin), and Colorado (Denver MSA).
You can view their current listings here to see the available homes for sale.
Selling Your Home with REX
- You create a REX home profile
- Then you’ll be sent an independent home valuation
- If you proceed a photographer will snap shots of your property
- And a REX concierge member will determine a listing price
To get started, you simply enter your property address and a REX home profile is created. From there, you’ll be sent an independent home valuation report and given the ability to ask any questions regarding a potential sale.
If you decide to proceed, REX will assign “an industry leading photographer” to your home to take photos for the listing (the photos I’ve seen look sharp).
While they may suggest a price, you are able to set any price you’d like. Your property will then enter a six-month exclusive agreement with REX and go live on rexchange.com.
How Will Buyers Find Your Home?
- Since REX homes aren’t on the MLS
- You lose some potential marketing coverage
- But your home will still be found on Zillow, Trulia, Yahoo Homes, etc.
- And you won’t have to pay the usual 2-3% buyer’s agent commission
If your property isn’t on the MLS, you may be wondering how anyone will know it’s for sale. Or how to find it.
Well, REX claims the MLS is mainly for agents, not consumers. They’ll still “aggressively market” your home on popular websites like Zillow, Trulia, Redfin, Yahoo Homes, and Bing, and via print ads and direct mail.
They’ll also promote the property via open houses, which as I’ve warned before, can be in the best interest of real estate agents and not home sellers.
If you do decide to go the open house route, REX will host it for you as a normal real estate agent would. You can also allow private showings by selecting when you want your home to be available via the REX electronic calendar.
When a buyer expresses interest, they can check your calendar for available dates and times to view it. Once they select a time, a REX concierge will meet them at the property to show them around.
Once you receive an offer, you can review it with the REX concierge and determine if you want to accept or counter.
Assuming you accept, that same REX concierge will guide you through escrow as a normal real estate agent would.’
If the property doesn’t get any offers during the listing period, you can either extend the listing or terminate it at no cost.
Buying a REX Home
- If you’re thinking about buying a REX home
- It might be in your best interest not to use an agent
- Since their commission will be your responsibility
- Just be sure REX advocates for you in terms of a fair purchase price
Now let’s talk about the buying process with REX. You can buy a REX home with or without an agent.
If you have/want a buyer’s agent and go into contract on a REX home, the buyer agent’s commission will be your responsibility, not the seller’s.
So if they ask for the typical 3%, you’ll have to pay them out of pocket or finance the commission as part of the home purchase.
In other words, you’re probably better off buying a REX home without an agent by simply visiting rexchange.com and touring homes on your own. Just know you won’t have an independent agent helping you make an offer.
Of course, REX argues that buyer’s agents aren’t necessarily on your side anyway since their main objective is to get a sale. They’re essentially negotiating with the listing agent to close. Be careful if you go it alone to avoid overpaying for a property.
If you see a home you’re interested in, you can set up a viewing via the listing’s interactive scheduling calendar. Select a date and time and a REX concierge will meet you. Often you can see the home the same day or with little delay. You can also call REX at (805) 774-0800 to schedule a meeting.
Additionally, there’s an “Ask A Question” button on the property detail page that allows you to inquire more if you’re interested.
Like the sell-side, the buy-side is run by the REX concierge, who helps you with the asking price, paperwork, and escrow.
You can use inspectors, mortgage lenders, and escrow and title services from companies REX works with, or choose your own. I would certainly shop around to ensure you get the best pricing and the most objectivity.
If a home isn’t on REX, you can use the REX Knock App (available in iTunes App store) to take pictures of any home and send the owners a non-binding offer. REX will then get in touch with the homeowner to see if there’s any interest in selling.
Our Thoughts on REX
- REX homes come with a 30-day buy back guarantee
- And you can use REX Home Loans to get financing
- While cutting real estate agent commissions sounds good on the surface
- Make sure the overall price winds up saving you money whether you’re the buyer or seller
At the moment, there aren’t very many homes on REX, so if you’re buying, you won’t see much inventory.
However, if you do see a property you like and it happens to be listed by REX, and you don’t have an agent representing you, you’re free to make an offer and avoid the typical 6% commission that comes out of the sales price.
That could mean a slightly cheaper home for you, though the seller might be the one saving the lion’s share if they’re still listing for a relatively high price.
The key as a buyer is to find a home that is cheaper than what it would be with a full-service agent.
If you’re a seller, REX seems like a great deal because your home still appears on all the big platforms like Redfin, Zillow, etc. That means everyone will still see your home, unless buyer’s agents try to hide them.
To that end, you could save a lot of money as a seller with REX. Instead of giving away 6% of the sales price, how does 1% (2% now) sound? Still sounds good to us.
Remember, the costs to sell a home are very high and often leave very little behind for a down payment on a subsequent home purchase.
REX claims its listings have sold 40% faster than traditional real estate listings and at higher prices.
If that’s true, and it costs substantially less, it could be a great deal. But as mentioned, you have to be careful to ensure you don’t pay too much (as a buyer). And make sure you get top dollar (if you’re the seller).