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.
However, it’s 2% total, meaning you don’t have to pay the buyer’s agent commission anymore.
If the buyer happens to use an agent, REX will request that the buyer pay their fee, potentially by financing it as a part of the home purchase.
That can still save the buyer money if the purchase price is lower than what it would normally be.
And it 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), Oregon, 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).
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).
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%.
WHAT STATES ARE YOU IN
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.
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!
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.
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.
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.
John Fulton I very much doubt with just Rex and a few other sites sellers get as much exposure as on MLS. Here in Houston being on HAR gets much more exposure than on Zillow or other sites. Problem with Zillow and most other sites is there property value estimates are usually off and in some cases way off. Most agents are not going to show their properties if Seller is not paying the agent a fee to sell. Yes they could ask their buyer for a fee but typically seller pays the fees. If Rex offers no fee to buyers agent then they may skip that property and go to the other 85% of the properties that are for sale and offered in MLS with commissions offered by selling brokers. Also if Seller is not offering a fee it may insure a lower price from Buyer if buyer is going to have to pay his agent.
Real Estate agents lie when they say the commissions are paid only by the seller. The last time I checked, the buyer is the only person bringing the money to the table that pays everyone, seller, agents, brokers, and escrow.
The source of all funds is the buyer.
You bet.
This concept will have its share of the market at some point.
However, many sellers in the $400k market are very sophisticated.
They also understand that cutting corners on a transaction of $400+ by using an internet ghost, if you will, is a bad idea.
A lawyer who represents himself has a fool for a client, adage says.
For years, I had a company that charged 4% for listings to sell.
With the understanding that the seller would purchase their next home through my company.
Many sellers have all the knowledge and tools to buy and sell homes on their own. However, professional providers are used.
Buyers and sellers beware.
Do your homework.
Good luck.
Stay safe and free.
A healthy real estate market attracts companies like REX, PERCH, REDFIN, etc.
After looking closely at REX which has like maybe 20 listings in our major metropolitan area where over 1,000 times that many homes are sold each year, they are a losing hand.
Virtually every REX listing was a former MLS listing and was either the same price or higher. But that does not matter as it was invisible.
True, buyers are finding the homes first but typically with the assistance of a licensed agent that creates search engines that notify the buyer who then calls or emails the agent and then goes through the buying process.
REX clients save $0.00 as buyers will feed on them as the same as for sale by owners and negotiate at least 3% off of what the buyers would have paid normally.
And as pointed out, REX is only 2% if you have a much more expensive home. Their fee is actually higher than a conventional agent in our area as our average sales price is just over $250,000 meaning that $9,500 is almost 4%.
Redfin Does a much better job IMO
Rex has been a nightmare for my wife and I.
Buyer failed to get funding twice and asked for a 3rd 3rd party addendum we refused and said we want out. 5 minutes later Rex says the buyer has cash and is ready to close anytime. Everything since day 1 has been dishonest and as mentioned above you will not get full price from my experience.
It appears that REX agents are licensed sales agents but not members of a real estate association. Since REX is selling out side of the MLS then the REALTOR commission split rules do not apply.
Erazzman,
We also just discovered how dishonest REX has been to us, after receiving two offers on our property via them.
I am currently experiencing a tremendous, unexpected downside to REX. They told us that we would only pay a 2% total commission, but we recently became concerned when all but one of their showings were with non-REX agents.
We tried to alleviate the obvious potential buyer’s side problem (i.e., of the buyer having to pay the buyer’s agent’s commission) by having REX list “our” REX agent’s contact information at the top of their listings. However, they have thus far not done so, giving the excuse that appointments need to be made via their call center. We then said to put the call center details at the start of all ads for our property, but they have thus far failed to do that, also.
We received two offers on the same day, last week, both of which expected us to pay their buyer’s agent’s fees, contrary to all of what we had previously been told by “our” REX agent. Furthermore, other than providing us with very basic details about the offers, the agent has provided no other details. It is now several days after having received the basic information about the offers.
To say that we are upset that REX has put us in this situation is an understatement. They basically falsely claimed that we would only pay a 2% total commission, and then they have presented us with two offers requesting us to pay both sides of the commission. Furthermore, they never provided us with MLS, etc. exposure due to the “fact” that we would not be paying the buyer’s agent’s commission.
The REX agent did say that we can refuse to pay the buyer’s agent’s commission buy telling them to make a well above market offer to cover it, but in that case both REX and the buyer’s agent’s commissions go up, since REX is calculating the commissions based upon the total amount of the deal. That is, they are calculating the commissions as a percentage of the net amount to us plus both commissions, which is no different than if we used a full service agent, but we received no MLS exposure.
Furthermore, if we followed REX’s advice and the buyer agreed, they would be overpaying. If we refused to pay any buyer’s agent commission on those offers, the deals will likely fall through, since those agents want to get paid for the work that they did, just like anyone else. If the deals did go through in the latter case, the buyer’s agent would get cheated. If we agree to pay all commissions, we get cheated.
Thus, my current assessment is that REX is a tremendous scam.
As a licensed Real Estate agent in California, I can clearly see the benefits and detriments of REX. REX is better then a FSBO in the sense that you get greater exposure and someone else does the legwork and paperwork.
Homes listed by REX will not be shown by traditional R/E agents as there is no profit in the work unless their buyer pays them a fee. However, a REX seller can offer buyers agents a fee to sell their home if they so desire, it may not be 2 or 3% but it would provide a tiny bit of incentives for traditional R/E agents to show your home.
Well, I was just about ready to call REX to list my home. After reading all these reviews, I think I changed my mind. I need my home sold Now, not Later.
I don’t want to pay 5.5 to 6%, but I may have to go with an agent.
I am going to check up on RedFin, hope they have better reviews.
Tom
So not true. Seller pays their expenses which is deducted from selling price (their net proceeds). Buyer pays their own expenses for the transaction. Buyer does not pay seller expenses unless something specific is agreed upon and added to the contract of sale.
Most of these comments seem like sour grapes on the part of traditional realtors. The industry is changing and they don’t like it. The days of paying 6% and more are becoming a thing of the past. I also think that just because the seller has traditionally paid the buyers agents fee, is not a reason that should be the case. The buyer should pay for the service and for their choice of hiring said agent, as it benefits them. The seller is already paying for the service of the sellers agent.
I don’t discount that change is good. I embrace change. I’m just not so certain a goal of eliminating the MLS and the service that Realtors provide to the consumer is healthy for the consumer. For instance, I have a MLS listing that just hit the MLS and 1 day later I have 5 offers all from Realtors already working to help their buyer customers find a home. The MLS works and Realtors work hard. I have been a FL Lic. Real Estate Broker for 25 years. You cannot replace that experience.
Couldn’t sell my place. 4 month exclusive a joke.
Eventually got a 5% agent sold place in under 2 weeks at a price that made up for the commission difference.
4 months of millennials swiping left on an app is not concierge service.
Stay away unless you are in San Francisco.
The good news: since they don’t list on MLS when I did list with real agent it showed up on Zillow as day 1.
We currently have a listing with REX and there is no activity without MLS. All other homes in similar condition near our listing are selling under 2 months. If you are unhappy with REX and like to leave prior to their 4 month commitment, there is a minimum $9000 penalty. Do yourself a favor and pick a 5% MLS enabled agent, or your property will have little to no buyer exposure.
We regret signing on with REX. Awful mistake!!!!!
REX is a joke – they tie you in with a 4 mth chain…and we listed with them and not 1 offer so far (its been 30 days) …meanwhile the home around us left and right are pending and sold. They didnt even put fliers on the for sale sign. Now were stuck with them until Aug when the summer is gone 🙁
They do not tell you up front that the 2% is only if they are contacted by a buyer directly. If an outside broker is to show the house you are to pay the 2% and you as the home owner are responsible to negotiate the commission with the outside broker. Wasted an entire day waiting for a Rex agent. Their target audience is people who need to sell their homes right away.
Both parties can’t “save” the fee. Both need representation. Traditional Brokerage is the best, fees can be negotiated to typically 2% on each side, therefore 4% in total, Buyer & Seller both pay in a sense; Seller pays at closing, Buyer pays by bringing the money. It’s the cost of doing business with professional representation. These discount or Seller only or Buyer only reps. will inherently have problems since the lesser fee will minimize proper representation to the affected party. When the market shifts, these types of RE companies will die, they are order takers from out of state who are not local and simply don’t know markets.
I’m evaluating Rex vs traditional real estate agent. I’ve met with Rex and RE agents. I’m not in favor of the traditional 5-6% fees that are split between the seller’s and buyer’s agents.
What I know of Rex is this: 2% fee. They don’t list on MLS because it dictates splitting fees. The exposure may or may not be less giving social media, Zillow, Redfin, etc. Rex wants to attract a non agent buyer to close both sides and not split the fees.
To see how effective Rex is in your area ask for 1 year or 6 month stats:
Numbers of property listed
Number of properties sold
Average time on market
Sale price vs list price
Number of properties sold in conjunction with non Rex realtors
In today’s market, buyer’s are typically finding properties on their own. Then they call their agent to open the door. If they are interested, the buyer’s agent will fill out an offer sheet and submit to the seller’s agent. The seller’s agent does the rest.
If it were me and I found a Rex property on Zillow, Redfin, etc. and my agent wouldn’t open the door because there’s no commission for them, I would go directly to Rex agent.
Now, I wouldn’t be opposed to working with a buyer’s agent if the buyer is pre approved, is a all cash buyer or the buyer is offering above list price.
In this situation, bringing a buyer that is assured of closing, may be worth a point.
This REX company has less than 100 listing active in the United States. An agent that represents a buyer and not only shows them a lot of property but also is willing to negotiate on behalf of the clients deserves payment. This company should be a scam. The reviews were made from different states. They do not know the real estate market in the locations where they list the houses at. They stay in the market longer than 3 months. It is ridiculous. You want to damage the industry and Zillow should not allow this.
Utilized a flat fee broker in Albuquerque. Excellent experience for $950 which saved $5000. I did pay the 3% buyers agent commission. I did research prior to listing. Read many sites and blogs from around the country concerning flat fee listing brokers. The consensus: clients happy with flat brokers are willing to wait slightly longer for a sale and the accrued significant savings given what appears to be systemic blackballing of such listings by high fee brokers. But this is just the sleaze factor at work in a cabal type of totalitarian environment. Perhaps this, in part, is why public opinion polls on integrity, trustworthiness and honesty uniformly place real estate agents in the bottom quartile along with lawyers, stockbrokers, car salesman and politicians. IMHO, it is the buyer’s agent who does the work, and I have zero problem paying the monopolistic 3% commission.
I initially placed the home on Zillow and Craigs List as FSBO and showed the home twice in several weeks. But what I received during that period was a relentless volume of phone calls from agents wanting to list the home, usually stating there were more buyers than homes in the price range of mine. I would respond, if there are so many buyers, bring them to me and I’ll gladly pay the 3% commission. It all seemed about garnering the listing and locking the seller in for six months, the easy money side of the transaction. I have zero use for such parasites.
I have also sold a home FSBO, NO agents involved. That was a truly a superb experience saving big $$$ and not having to be exposed to a traditional RE agent!! Paid a real estate attorney $1000 for his services, title company does the rest.
REX sounds just like PurpleBricks. Same concept and same everything. PurpleBricks just went bankrupt in UK, Australia and on West Coast. I don’t think this one is going to be any different. Very misleading article as I am a past seller who used a discount brokerage. It was terrible. Ended up listing full-service and I made more in net by doing so because of a strong listing agent.
Just called REX to list my house. They said they only have just “ONE” and only “ONE” person working in my state right now. And it would be at least TWO WEEKS before they could get back to me. not good! so in other words, if i had a buyer, ready, willing, and able, to write a full price offer right now! is what they are telling me that i’m going to have to wait at least 2 weeks for them to get back to me and write the offer! not good!
This is not a legitimate company, based on their poor follow-up on offers and no response to several calls and messages.The seller is at a disadvantage with their home priced above market value (for Rex’s benefit) and yet, no offers. Or so we think. The seller’s home is still on the market after almost 2 months. How sad. Maybe the lower offers aren’t being shared with the seller, as Rex would make less commission. Hmmm….
Here we have qualified buyer like me, but no action on Rex’s part – and a neglected seller, who is getting the short end of the stick with poor servicing of their contract with Rex.
I would never list my home with Rex. Big mistake.
May be different in your area but you also may miss out on a better offer. Here in Colorado we got some asking price offers and we got some 10k+ above asking offers with the buyer paying closing costs on top of that. More offers generates competition, in turn driving up what you can get. My realtor got the house appraised at the higher price. The extra 10k covered all realtor fees so I walked away with asking!
Worst company ever! They conned my elderly parents into thinking they could sell their home with them. 6 months later only one person even showed any interest! They had them (parents age 75) clean their home for showings weekend after weekend but then would cancel last min. They are NOT to be trusted! Horrible communication and they prey on elderly people! My parents home is gorgeous and in a area that is highly desired! There is zero reason why it didnt sell! They did a very poor job at every aspect of this deal! Thank goodness my parents got legal counsel and got out of their contract! What a waste of time, money and stress! My poor parents where put through the ringer and this company should be held responsible for their awful conduct and poor business tactics. They are liars!
Rex is a terrible business model with false claims such as “Game Changing Technology” of which there is nothing new about what they are doing. I was involved recently with a Rex agent – who turned out worked for a traditional brokerage and worked for Rex on the side. In bypassing the MLS systems that list homes for sale Rex is eliminating a HUGE part of the real estate market. Also Rex is asking consumers to put 100% trust in the Rex agent and NOT be represented by an agent representing the buyers’ and their best interests. On this transaction my buyer’s and I decided to terminate our offer due to the limitations placed on myself and my clients. That house was for sale for months before sellers’ fired Rex and listed with a traditional real estate brokerage AND then sold within a few weeks. Rex will not be around for long.
I have had my home listed with Rex for 5 weeks now. I’ve had 2 showings in one of the hottest real estate markets in the country. you get what you pay for. there is little communication. and what you are promised is definitely not what is delivered. in today’s landscape you want things to move fast because who knows what the future might bring. I can’t wait until my contract with rex is up. I just hope in the next 3 months the market is still hot and a real company can sell my home quickly.