Rex Real Estate, the Los Angeles, California-based brokerage that operates outside the multiple listing service and charges homesellers a 2-percent listing fee as opposed to the industry average of 5 to 6 percent, announced it has raised $15 million in a Series B investment round. It claims to be the “first full-service real estate agency that does not use the MLS.”
The funding round brings the company’s total capital to $30 million, according to Rex CEO Jack Ryan, a former Goldman Sachs executive who founded the service last year.
“Our all-star investors and world-class management team are deeply committed to improving the real estate industry,” said Ryan in a prepared statement. “We are proud to have built a service that puts massive amounts of money back into the pockets of the consumer.”
Investors include former Sun Microsystems CEO Scott McNealy; Best Buy founder Dick Schulze; Crate & Barrel founder Gordon Segal; former Google executive Amit Singhal; and former McDonald’s CEO Jack Greenberg, according to an announcement.
Rex’s technology platform replaces the conventional real estate model with artificial intelligence and other digital solutions in a bid to streamline the sale of residential property “and market homes directly to buyers instead of relying upon traditional agents,” according to the statement. The fully licensed brokerage eschews MLS listings in a bid to avoid costs associated with pricey MLS platforms, the announcement noted.
The industry standard listing fee of 5-6 percent includes both the buyer’s and seller’s agents’ commissions. According to Rex’s website, Rex slashes the listing fee by nixing commission from the equation entirely. A Rex agent facilitates the transaction, but if a buyer were to bring an agent to the sale, Rex would expect the buyer to cover his or her agent’s commission, making that 2% listing fee for the seller possible.
Rex is currently accepting listings in Southern California and New York. The brokerage will expand into Austin, Texas, in February, according to its website.
Editor’s note: This story has been updated with additional information about Rex’s business model.
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