A new brokerage is creating stiff competition for traditional real estate agents. REX Real Estate Exchange (REX) uses artificial intelligence, machine learning, and robots to connect buyers, sellers, and properties—all for two percent commission.
Jack Ryan is the Co-Founder and CEO of REX. According to Ryan, REX can “tell everybody who lives within five miles of your house who has the basic means and motivation to buy your home.”
The California-based company has closed 231 transactions since it launched in 2016. The company represents sellers and buyers, using ad-click history and recent purchase decisions to identify potential leads. Homeownership history also plays a role in the analytic process.
The company has a number of high-profile supporters in its initial round of funding, which reached $25.5 million this Fall. Investors include Best Buy Founder Dick Schulze, former McDonalds CEO Jack Greenberg, and Founder of Crate & Barrel Gordon Segal.
Breaking Down the Process
The home-selling process begins with REX releasing an initial batch of ads based on hypotheses about where likely property buyers may be located. This initial run may consist of 500 ads. REX uses associated data from tallied clicks to create a profile of the most likely buyer. REX then “finds more people who look just like those 500 people who clicked on the ad,” says Ryan.
The computer program tailors the ads and stores all the information to help REX identify potential homebuyers and sellers. Retail purchases and online business information also plays a role in the automated marketing process.
“The fact that you bought a hammer itself isn’t very informative to us, [but] the changes in the rate at which you are buying home supplies is very important to us.” The program is able to use cumulative data to identify which features of a home should be emphasized in order to maximize the odds of the property selling quickly, for top dollar, or both. “There are dozens of pieces of data, each of which changes the probability by one or two percent,” Ryan explained.
What About Agents?
Although considered “alternative tech-driven real estate,” REX still has 22 agents in New York, Denver, and Southern California. Human staff members meet with buyers and sellers when they initially agree to work with REX. Humans also accompany robot representatives to open houses.
The robot can answer about 75 different questions about the history of the property. Human agents provide services such as guiding all parties through closing, writing and evaluating offers, handling inspections and title insurance, and dealing with escrow.
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