Experience or recommendations for REX real estate?

Question

These guys have been running radio ads on Comedy 103.1 offering a 2% flat rate when selling.

https://www.rexchange.com

Just wondering a few things.

1. If anyone has used them

2. What kind of service do they provide at that rate, especially when a sale runs into road blocks.

I found out that they are sourcing buyers directly through their website (and possibly other marketing channels) to cut out the middleman and their expected 3% commission. So that's how they can pull this off.

Also, I can see this 2% rate being acceptable for on-staff newbie selling agents in a hot market like Denver where average home prices are high. (2% is nothing in a low priced market) The website lists San Francisco, San Diego, Denver, Austin and Houston, so that makes sense.

James Carlson · Answer

Ugh, at the risk of being the Denver real estate agent who -- surprise, surprise -- questions this model ... I call BS. Let me first say that I am NOT one of those agents that thinks automation will never consume our industry. I think someone will figure it out, and we'll be toast at some point. I think that's especially true here in Denver and Colorado Springs and elsewhere in Colorado where the market is hot.

That said, this doesn't seem to be that golden idea that kills us off.

• Like it or not, monopoly or not, the MLS is where the vast majority of serious buyers are looking for homes. A serious buyer is using an agent, and an agent is setting them up with an MLS account. You might find lurkers, but those aren't serious buyers.
• You want the best price on your home? Open it up to market forces, not tailored targeting to one or two potential buyers. 
• They skip the MLS by targeting potential buyers on Google, Facebook, Zillow, etc. They probably do that with the same targeted marketing we do in our company ... targeting "likely buyers" and "first time homebuyers," etc. Those people are those who have indicated online that they want a house and are likely people that have an agent who has a contract saying they will get paid however that buyer finds the home. If the buyers don't have an agent, they again are not actually that close to buying, in my opinion. 
• A more vague resistance I have to this idea is that they appear to rely solely on finding unrepresented buyers. I don't like transactions where one party is represented by a professional and the other is not. It seems unfair, ethically, and it also can lead to legal problems when one side may not fully understand everything going on.

What do others think?

Matt M. · Answer

A good friend of mine had them come out and look at one of his homes out of curiousity(He's a Realtor too). The kid spilled the beans that they were barely doing any business. A LOT of their listings expired and sold after they were put on the MLS with an experienced agent.

My understanding is that they put your home everywhere but the MLS. This is a HUGE disservice to sellers. The market IS the MLS, so if your home is not there, then it's not on the market.

Kevin Grinstead · Answer

Hi James,

Check out there website and they only have a few listings in the area. If you select them, they may not allow other agents to view the property and it will be a fight for the buying agent to get paid.

The model is, since I can't compete on satisfaction and added value to the transaction, I will get listings by cutting corners.  Check the statistics out there and you can see that an effective agent will make the sellers far more money than what they are saving by a discount company.  There are companies out there that will put your listing on the MLS for 1/2 of 1% but they will not provide you with the marketing and service that a full service agent does.

As a rule of thumb the cheapest is not always the best. There is a reason why Macy's is still alive and well and Kmart is basically dead.  Walmart took the place of kmart as cheapest and Macy's is for the best service and best quality, I am willing to pay more.

Chris Lopez · Answer

@James Brown I haven't done a deal with them. But I've had clients send over expired listings from Zillow that were not the MLS. As @James Carlson pointed out, the MLS is where the action is. That's where people still look to buy properties. It's really two models they have:

1) The low discount brokerage model

2) Starting their own exchange - Which seems like an uphill battle. It'll take a lot of work to get people going there and what better result is it going to be for people?

Lon Welsh, founder of Your Castle, sent out an email about TRELORA today:

https://www.bizjournals.com/denver/news/2018/12/12/trelora-joshua-hunt-resigns.html?ana=e_mc_prem&s=newsletter&ed=2018-12-12&u=l0iE36KwYIaL67dZzZI3E8/AQBr&t=1544634164&j=85498461

On another note, TRELORA a few months ago, started recommending that their sellers pay the full 2.8% buyer's agent fee.

Tim Emery · Answer

@James Brown Most of these guys don't last very long. What they don't tell you is, as a seller you still have to pay the buying agent. Usually the buying agent fee is 2.8%. There have been companies that have paid buying agents less but for some reason they aren't as successful. Real Estate commissions are always negotiable. Do your due diligence on these types of agents and make sure you get represented the right way.

I pay my listing agents 4.5% - 5% knowing they have to pay the buying agent 2.8% I never allow them to cut their buying agents commission

Good topic!

Kay M Rowe · Answer

Just found this on Google Reviews:

"Greg Draper15 reviews4 minutes ago-They low balled my sales price by 100k. I Still would be responsible for paying the buying agents fee of 2 percent as well plus there 2 percent equals 4 percent. I listed with a normal agent for 3 percent total. So I saved at least 1 percent commission. Plus I sold it for 100k more than there market evaluation on my house,.. Not the way to go. Do some research. You don't get a lot for your money and there market evaluations lack accuracy."Also, checked their FB Page. Only 5 Reviews, all positive, but for all I know they could have been staged.  First review was from 2015, last one from 2018. No reviews at all this year.

My take is that they are not Realtors, they are Agents, so have no fiduciary duties to their clients.  Also, they only post their listings on their own site, not even on Zillow, Trulia, Realtor.com, etc.

I decided to check out their job postings, just to see what I am up against.  Example, both postings for CO Agents (not Realtors), stated as part of ideal qualifications, had to be licensed in CA????  I brought this up on their chat line and an email and no response. A typo, I guess. When I checked out Ads for TX, they didn't have to be licensed in CA.

Many excellent Realtors will list at a flat rate or under 6% especially if a long time client and one who is also purchasing.  The commission is always negotiable.  And like stated by others in this thread, you get what you pay for.  If a Seller is so desperate to get a cut rate on the commission, then it's on him/her when it goes awry.  And they could end up in a situaton with no recourse.  Note: They could have onboard attorneys who eliminate the mediation/recourse clause and someone not savvy with Real Estate contracts would not notice.

Oh well, I'm not worried about it.  They are transactional, I am relational and always will be and I have dedicated clients who wouldn't risk going that route.

Andy Palmer · Answer

I called them on my last flip.  I was curious and enticed, so wanted to learn more.  I spoke with a rep briefly, informing her that I buy and sell multiple properties a year.  Presumably, they would want to work with flippers.  After gathering some information, the rep said the local 'agent/boss' would call me the next day to learn more about me and the property that was nearing completion.  They never called.  That said enough about the company to me to not pursue anything further with them.

And I would suggest that it speaks volumes that no one on this site seems to have used the service.

Matt M. · Answer

Is she offering to pay a buyer's agent? That puts her at 4.8%... There are discount brokers here that will do it for less. Also, who is going to list it in the MLS? That listing agent can't just list it in the MLS per State Law.

Gina Riccitelli · Answer

A friend is determined to save on commissions against my advice "you get what you pay for."  However, I think Rex 2% combined with a flat fee mls listing $400 referring buyers to Rex, could get the job done, where the seller is concerned. She's comfortable with the paperwork.

Experience or recommendations for REX real estate?

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