Real estate tech company aims to replace agents with robots, data
A real estate technology company that aims to lower the cost of home-selling by using robots and “big data” instead of commission-based real estate agents has opened a Long Island office — its first outside of California.
REX Real Estate Exchange, which charges a selling commission of 2 percent instead of the usual 5 percent to 6 percent, launched its Long Island operation last week, when it started operating out of a co-working space at RXR Plaza in Uniondale. The Los Angeles-based company expects to start listing New York-area homes on its website, rexchange.com, later this week.
Traditional real estate fees “are just crazy high compared with every other industry in the United States,” said Jack Ryan, Rex’s chief executive and a former partner at Goldman Sachs. Decades ago, investment brokerages charged 12 cents a share for stock trades, but now they charge less than a penny, he said. By lowering real estate fees, he said, his company is “doing the same thing with residential real estate.”
REX, which has raised $16 million from investors, is not the only company seeking to upend the residential real estate sales model.
Another new entrant to the housing market is EasyKnock, a Sag Harbor startup that is rolling out a website designed to match sellers with buyers without the intervention of brokers.
The company, which has raised $1.2 million in venture capital and plans to go live in about a month, lowers commissions to 1.5 percent and does not list homes on the Multiple Listing Service of Long Island, said co-founder and chief executive Jarred Kessler. The MLS is a way for brokers to share information about homes for sale.
“We’re a broker-free ecosystem,” Kessler said.
Among national brokerages, Seattle-based Redfin charges sellers a 1.5 percent listing fee — or 1 percent in a few communities, including Washington, D.C. — though unlike REX and EasyKnock, it also pays a commission to the buyer’s agent.
In a typical home sale, the commission gets split between the seller’s and buyer’s brokerages. If a home sells for $300,000 and the seller pays a 6 percent commission divided equally, each brokerage receives $9,000 and pays out a portion of that to the agents.
Long Island real estate brokers expressed skepticism about the tech-focused companies’ prospects for success.
“Discount brokers have attempted to be around for many, many years, and they just fall away because it is important to provide good personal services to the seller and to the buyer,” said Joe Moshé, owner of Plainview-based Charles Rutenberg Realty.
To be sure, few home sellers choose to bypass agents. Last year and in 2015, 89 percent of home sellers used a real estate agent, the highest share since at least 1981, said Adam DeSanctis, a spokesman for the National Association of Realtors....MORE
