As a real estate agent, I often am asked about new real estate startups before they are well known. Such is the case with Rex real estate. Fortunately for me, and unfortunately for the techies at Rex, I highly doubt that their platform will ever become a well-known real estate firm.
Is Rex Real Estate Legitimate?
According to Crunchbase, Rex real estate has raised $135M. Although, they do not operate in every state. The company has been around since 2014.
Selling Your Home With Rex
I see many inconsistencies on the web with Rex. For example, in this article, the author notes that Rex charges a flat 2% fee, yet on Rex’s own website, it states that they charge a 2.5% fee. I’m not sure if the 2.5% fee is on the gross sale price or net sale price of a home, but it appears to be the former.
Buying a Home on Rex
Rex could be a useful place to find a home. Their listings do not appear to feed over to the majority of other real estate websites (more on that later), so few people may actually notice Rex’s listings. In simple English, this means you may be able to get a good deal.
Rex does try to target likely buyers through online advertisements. However, due to the Fair Housing Act, it can be very tough to target certain demographics when advertising real estate.
Unfortunately for Rex, they only have five homes on the market in the Greater Boston Area (where I am), at the moment. Plus, I cannot easily locate important documents, such as a lead paint form, which you will need to fill out if you want to buy a home in Massachusetts. Other states have different forms.
The first major red flag with Rex is that they do not appear to have MLS access in my area. MLS is like the professional Facebook or LinkedIn for real estate agents. It’s where the vast majority of residential real estate listings are posted.
After reading other reviews on Rex, they do not appear to have MLS access in other regions, as well. To be successful in real estate, the ability to post listings to a local MLS is absolutely essential. It would be like a president without advisors, a doctor without an assistant, a pilot without GPS, and so forth.
Another issue is that Rex is not in every state. Since many buyers who look in my area come from other regions, they probably will never have heard of Rex. If I were to list my home with Rex, that means many of the potential buyers will have never heard of them, and will probably not be looking at their website to find a home.
And that brings me back to the bigger point: When a seller lists their home with Rex, how is anyone supposed to know it is listed there? Since many companies, like Zillow and Redfin, are fed listings from MLS, your home may not even appear on the websites where the majority of buyers are looking.
Testing Out Their Platform
As a small test, I looked at a nearby home listed on Rex’s website. While I did see the home on Zillow, it was not listed on our MLS, which is where most brokers look for homes. As noted, since it is not on MLS, those brokers will not know to tell their clients about the home.
Plus, since Rex does not appear to offer a buyer’s agent a commission (most seller’s agents offer a commission to a buyer’s agent), an agent may unfortunately not bother telling their client about the home.
When listing a home, it is imperative that it is advertised as heavily as possible. We have never been able to accurately predict exactly where a home’s buyer will come from. For example, we recently sold a home to a foreign buyer who never even looked at the home. He was told about it from his agent. I doubt that buyer was looking at Facebook or Zillow for their next investment property.
My Review of Rex Real Estate
I do appreciate Rex’s attempt to lower the cost of buying or selling a home. That should be applauded. As I have wrote about many times before, buying or selling a home is far more expensive than in needs to be.
However, trying to go at it completely on your own (like Rex does), won’t work unless you have Bezos or Musk level funding. I also believe that not publicizing a home for sale as far and wide as possible does a big disservice to a seller. Simply put, buyers could miss out on a home listed with Rex.
If I were a seller, I would hire a conventional real estate agent. If I were a buyer, I would browse Rex and move forward only if a property was priced competitively. Otherwise, I too would hire an agent and begin my search on more established websites like Realtor.com and Zillow.
Rex real estate belongs in the prehistoric era with velociraptor realty and triceratops homes. I do not see how this startup makes it.