REX gets $45 million, expands AI and big data real estate listings in California
Company banks on 2% commissions, enters Northern California and Sacramento
Some big-name investors believe consumers are looking for a cheaper way to purchase and sell homes — and challenging the decades-old multiple listing service real estate model.
Woodland Hills-based REX recently completed a Series C round of funding, raising another $45 million. The funding allows the startup to expand services and enter new markets, including Northern California and Sacramento.
So far, the company has raised $75 million from deep-pocketed investors, including Sun Microsystems co-founder and former CEO Scott McNealy, Best Buy founder Dick Schulze, and Crate and Barrel founder Gordon Segal.
REX says using artificial intelligence (AI) and big data can save its customers an average of 60% compared to traditional agent transactions. REX offers a fixed 2% commission — two-thirds less than the standard commission fee — and real estate professionals will handle the transaction from listing to close, including escrow, title, mortgages and insurance shopping.
“We are at a transformational moment in the U.S. real estate market with consumers demanding lower costs, great service and the benefits brought by technology that have transformed so many other industries,” says Jack Ryan. co-founder and CEO of REX. “REX offers a more affordable, convenient and transparent way to buy and sell homes, in contrast to all the brokerages that depend on the MLS model that uses protectionist packages to maintain outrageously high fees.”
More competition for traditional brokers
REX is just the latest company to challenge the long-standing real estate brokerage system, where 6% commissions are often paid by home sellers. Of course, sellers can always negotiate a lower commission. Also, licensed real estate agents and brokers offer an extensive list of services, including advertising and listing on MLS, where home shoppers can find homes via the internet, including sites like Realtor.com and Zillow.
But Purplebricks, Open Listings, Redfin, Zillow and others are competing for customers with the traditional residential real estate brokers. The California Association of Realtors, which represents many of the licensed agents and brokers in the state, would not comment on REX.
Big names, big dollars
Other well-known REX investors include Amit Singhal, former senior vice president of search at Google; Carlson chair Diana Nelson; Jack Greenberg, former CEO of McDonald’s, and Muneer Satter, chairman of Sutter Investment Management.
“REX is delivering a residential real estate solution in step with how consumers actually behave and what they actually want,” McNealy says. “REX has expanded rapidly and has been managing its business with incredible focus and we’re delighted by the way homebuyers and sellers across the U.S. are responding.”
In 2018, REX expanded to Northern California, Colorado, New Jersey and Texas. The company says listings increased 300% last year compared to 2017, and saved customers more than $12 million in fees.
Feature illustration by Elenabsl/Shuterstock
About the author
Ron Trujillo, an award-winning business journalist-turned-public relations executive, is the editor-owner of CalHomeNews and can be reached at firstname.lastname@example.org.