REX (Real Estate Exchange) Review – They Only Charge 2% to Sell Your Home

May 18, 2016 7 Comments »
REX (Real Estate Exchange) Review – They Only Charge 2% to Sell Your Home

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

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).

A REX concierge will also do a walk-through of your home, review comparable sales, assess market conditions, and run automated value engines to determine an appropriate listing price.

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’re allowed the typical contingencies such as inspection and I assume financing to ensure you don’t lose out on your earnest money deposit.

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).


7 Comments

  1. brian April 25, 2018 at 8:27 am -

    This article is critically misleading! REX only charges a 2% commission on homes SOLD at $450K and above. Homes listed or sold for less than $450K pay a flat $9,000 fee Plus, a $500 processing fee. Which, can come out to be much more than 2%.

  2. PAT ZITO June 11, 2018 at 7:53 am -

    WHAT STATES ARE YOU IN

  3. Tricia Perkey June 21, 2018 at 10:41 am -

    The general public may get the idea from this article that Buyers are on the hook for paying part of the set commission on a sale. Say the fee is set at 6%. In my experience, that fee is set by the Sellers Agent: (whoever is listing the property for sale). The Buyers agent is then paid out out of that fee by the listing brokerage. If this rule still holds in the industry, buyers pay ‘nothing’ in brokerage percentages. It’s the Seller who signs the listing agreement and complies with the fee percentage.

    I know nothing about REX, per say, but I’m sure that they would appeal to a certain type of seller or buyer, but usually it’s never just cut and dry, as the person who posted above me pointed out.

    REX is a very innovative concept and it seems they are doing something right to be expanding.

  4. Steve Maloney August 21, 2018 at 5:43 pm -

    Tricia, you are right that when using standard CAR forms (in CA) it is the seller that is calling the shots on the buyer agent commission and therefore on the hook to pay it. I’m wondering if they are: 1) wording the standard RLA differently so that when using an agent as a buyer, the commission to that agent falls on the buyer’s shoulders, or 2) perhaps they’re using completely different forms altogether that spell out the buyer’s obligation to their agent, if they choose to use one. In any case, this service dis-intermediates the MSL’s, bypassing them completely. It happened in the long distance phone business, it’s happening with the likes of UBER. As a RE agent/ broker, we can’t ignore this sort of service. It’s not going away!

  5. Dinty Moore September 12, 2018 at 1:46 pm -

    Rex’s advertising is misleading. They say they will sell your home for 2% instead of the standard 6%. Most people know the fee is not ‘standard’ but is usually 3% for the listing agent and 3% for the buyers agent (selling agent). Rex can offer 2% all day for their listing fee but they still have to pay the buyers agent to get some showings. Also the 2% listing fee is no big deal. If I have a listing and I am going to sell them another home, I usually drop my listing commission to 2% or sometimes even 1 1/2 %. Do your research.

  6. JC October 18, 2018 at 1:04 pm -

    REX can not support their claims that they are providing much of a service to a seller when they are charging 2% which is 10 grand on a home in California at $500,000.

    They limit exposure by not also posting on MLS.
    They frame it as that costs money and MLS is out dated.

    This is not true. It is not as modern as Zillow, but Redfin uses MLS.

    THEN since REX agents are not flat fee and hold all the money for no extra services they do not have any arrangements to pay or discount buyer agent fees. No agent representing a client would want to deal with REX because their is no compensation for them. REX said the buyer could pay the agent. That is not how things historically are done.

    I had other questions sent to Johnna Biondi REX broker, but she failed to respond or return phone call.

    I guess that was too much work for her….or she did not like that I pointed out several holes in her one sided business model that benefits her the most.

    These realtor (s) make a lot of money in a short period of time for little work off people’s hard earned investment.
    In my experience I have met a lot of SLIME balls that only care about the money they can make off you.

  7. John Fulton November 1, 2018 at 7:50 am -

    Dinty Moore, you didn’t read the article… This is the problem with Realtors, they are oblivious. It is clearly stated that sellers do not pay any buyers agent commission whatsoever. It’s a 2% fee, all-in. And no, they do not “still have to pay the buyers agent to get some showings.”
    It is REX’s policy that if a buyer wants to use their agent, their fee becomes their responsibility. REX does not have issues with a lack of showings. They empirically sell their homes just as quickly for just as much money as traditional brokerages, except sellers get to retain the bulk of their hard-won equity. When a buyer sees a home on Zillow and their Realtor refuses to show it, they go behind their back and see it anyway. Buyers aren’t going to let a locksmith determine their future – their biggest purchase.

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