Real estate brokerage REX announced in a press release this week that it has secured a Series C1 cash infusion of $40 million.
To date, the company has secured $115 million in funding.
The mostly-online company is based on a non-traditional real estate model that charges customers a transaction-total of 2 percent and pays its agents a salary.
Listings are advertised primarily through digital channels, using persona-modeling to match properties with prospective online audiences.
The company claims that its technology solutions help reduce costs and buyer and seller stress.
According to the release, “By employing data science, machine learning and artificial intelligence, REX is able to price homes more accurately than traditional brokerages; then, target them to qualified buyers through Zillow, Google, Facebook, Trulia and more.”
Additionally, all ancillary but required professional services pertaining to a real estate transaction are being integrated with a REX deal, including lending, insurance, titling and escrow oversight.
The funding will also go toward securing licensing for each of those services in the states REX serves.
It is posited that a salary structure can allow agents to more clearly focus on service because they’re not under the duress of month-to-month financial uncertainty.
REX’s technology solutions also help streamline how its agents communicate with buyers and sellers and manage their transactions.
The company’s database is primarily sellers, but it does assist buyers with outside transactions, and in states where rebates are allowed, it gives back a portion of its income to the customer.
The company’s growth has been significant since its inception in 2015.
This year, listing contracts grew by 300 percent, and since launch has represented more than $2 billion in sales. It is estimated the clients of REX would have spent more $16 million had they worked with a traditional agent. REX’s listing contracts expire after four months.
REX also builds one home for a disadvantaged family for every 50 it sells.
REX Board Member Scott McNealy, who co-founded Sun Microsystems and served as its CEO, says that the company is hoping to provide more value than the traditional real estate service model.
“REX is leading the transformation of an industry that remains stuck in the past and doesn’t provide the value for money that consumers expect,” McNealy said. “We’re pleased with the way consumers are responding.”
The most recent round of funding will support additional growth in new markets and in general, expand the capability if its supporting professional services, such as escrow and titling.
Lynley Sides, REX’s president and a co-founder, said in the release that the typical real estate industry charges too much and that her company’s model is a “far easier way to conduct” a real estate deal.
“In contrast to the outrageously high charges levied by the MLS Realtor cartel, REX helps families preserve their hard-earned savings,” Sides said.
Jonathan Friedland, senior vice president of brand, communications and policy at REX said in a phone call with Inman that the industry has for too long focused first on the needs of its agents.
“We want to focus on the consumer,” he said. “We’re also in the process of upgrading our technology for the consumer, so they can be in touch with and manage the transaction.” Friedland is referring to REX’s app, which launched earlier this year.
Among others, the company’s backers include Best Buy founder Dick Schulze; Gordon Segal, founder of Crate and Barrel; ex-McDonald’s CEO Jack Greenberg; and previous Senior Vice President of search at Google, Amit Singhal.
“It is terrific to see the advancements that have driven down the cost of trading stocks and bonds being applied to the real estate markets,” Griffin said in the release. “I look forward to supporting REX as it uses predictive analytics and transformative technology to make the dream of homeownership a reality for far more Americans.”
REX operates in 23 cities in 17 states and is has headquarters in Austin, Texas, and Los Angeles. The funding will help REX aim for new markets in the southeast and west.
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