REX, a well-funded brokerage out to bypass the country’s multiple listing services, is launching a grand expansion, with plans to double the number of markets in which it operates by the end of summer.
The startup on Wednesday announced expansions into the Boston, Chicago, Phoenix and Washington, D.C. metro areas, after already branching out this year to markets in California, Colorado, Florida, Oregon and Pennsylvania. Its footprint also stretches across Texas, Arizona and New York.
With its expansion into the latest markets, REX will cover 20 major metro areas in 10 states and the District of Columbia, up from nine metro markets at the end of 2018, REX said.
The discount brokerage is presumably leveraging the $45 million in additional funding it revealed in January. In total, the company has raised $75 million in funding.
“REX has firmly established the legitimacy of its innovative model, which is better, cheaper and more nimble than what is being offered by traditional Realtors,” trumpeted REX CEO Jack Ryan in a statement.
REX charges sellers a 2 percent to list a home, significantly lower than the typical 5 or 6 percent agent commission. It does not list homes on the MLS, and says on its website that, while it will cooperate with buyer’s agents, “we don’t compensate them.”
REX says it can successfully circumvent the MLS by using artificial intelligence to price homes and reel in buyers through online platforms. It tries to lasso buyers through the listing portals that most agents use to market their listings. But it also targets them through Facebook, Google and other channels — sometimes also true of traditional agents, but not always.
Like many past low-fee brokerages, REX employs agents as salaried employees,” “judged on the customer service they provide, not the commission they bring in.” In contrast, traditional brokerages hire agents as independent contractors.
Other upstart brokerages that have launched using similar compensation models, such as Compass and TripleMint, tend to gravitate towards a traditional model — often in order to attract better talent.
REX reports tripling its listings in the first quarter of 2019 compared to a year earlier, representing homes collectively valued at more than $260 million.
“REX is the future of real estate and that future has already arrived,” Ryan said.