REX Real estate. The end of the realtor?
What Is the REX Real Estate Exchange?
The REX Real estate exchange isn’t some fly by night website. It’s a company that employs licensed real estate agents to handle transactions in-person and via its online platform. There are several selling points here.
REX real estate exchange takes the point of view that the standard 6% commission charged by most real estate agents is simply too much. We refer you back to the $30,000 in commissions paid on an average home sale in California. Instead, REX operates as a concierge service that charges the seller a 2% commission to handle everything related to the sale.
What does everything entail? They get your house photographed, market it, and help both the seller and buyer navigate paperwork. They’ll connect either party with mortgage, escrow and title services. REX real estate exchange will also suggest a selling price based on a walk-through and the results from a program that crunches stats and variables, though you aren’t obligated to use their suggestions.
One of the ways that they differ from traditional agents is by shunning the multiple listing service or MLS. In layman’s terms, MLS provides a kind of database of real estate offerings and a way for agents to lock in their commissions. Since REX doesn’t follow the standard commission fee structure, MLS provides limited value.
The concern, of course, is that this will limit the number of potential buyers who will see the house. REX real estate exchange deals with this problem by getting the house up onto all of the major real estate websites. Let’s get real here for a second. The vast majority of people looking for houses go to those sites, find the houses they’re interested in, and then talk to an agent. These days, almost no one goes to an agent and says, “Find me a house.”
Not getting listed in the MLS doesn’t cut potential buyers out of the process, it cuts agents out of the process. Which is really the whole point.
What Does This All Mean?
If you’re a buyer, you can also opt out of using an agent. This is a judgment call for buyers. If you don’t use a buyer’s agent, you avoid the commission fee entirely. That translates to substantial cost savings. The flip side is that you run the risk of overpaying for a property. If you use a buyer’s agent, though, you’re on the hook for having to pay for their entire commission.
REX appears to also have in-house buyers agents that all buyers have the option of using. A REX buyers agent works independently of any sellers agents and negotiate on behalf of the buyer like any traditional buyers agent would. More over, if you happen to be a buyer and want to buy a house that ISNT being sold by REX, you can use us as your agent and REX will reimburse the buyer 50% of the commission they would make in that “traditional” real estate transaction. So, back to the $500k example…if you are a buyer of a home that is not being sold by REX, and use REX as your buyers agent… REX real estate exchange would make $15,000 in commission (half of the 6% traditional fee) and then they would give you, the buyer, a check for $7,500. That’s enough money to do some pretty sweet upgrades to your new place the moment you move in.
REX puts you in charge
Where the REX model really shines for buyers is that it lets you pick your own companies in terms of mortgages, title companies and inspectors. This last one is especially helpful. Most buyer agents have a list of inspectors they prefer that you use. Some agents even “take the initiative” to pick an inspector for you. Ya… good idea. Let the person with the least amount of construction experience choose an inspector who is for the most part just a yes man.
Let’s think about that for a minute. An agent only gets paid when you buy a property. Any list of inspectors this person has should be met with suspicion. You better believe that agent isn’t recommending, for example, a Mazza home inspection. Why? Because after your Mazza home inspection, you’ll get an honest assessment of the house. The kind of assessment that might make you decide not to buy the house. And sometimes that’s not such a bad thing.
No agent is going to recommend an inspector who’s likely to scare you off of a property. They’ll pick inspectors who understand that future inspection jobs hinge on helping to sell the current properties. Plus, since California doesn’t regulate home inspection, your agent can pick someone fresh off an internet “training course.” The kind of inspector who doesn’t understand home construction and the acres of rules and regulations that govern home construction. Basically, they will always refer someone who’s either the perfect idiot or ready to toe the line.
It’s too early to be sure, but it’s entirely possible that REX real estate exchange will replace real estate agents. It’s not without precedent. Remember how there used to be travel agencies in just about every town in America. When was the last time you saw a travel agency? The Internet makes your phone or computer into the best travel agent in history. A fact that basically gutted the overpriced travel agency industry. With any luck, it’ll do the same thing for real estate.
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