Three significant flaws of the Rex business model

rex real estate business model

Discount brokerage services always work on a particular business model so is the Rex real estate company. If you have searched for the Rex business model’s flaws, you must be aware of the brokerage services.

In one of the reports, it is stated by the National Association of Realtors that 97% of home buyers list their properties or homes through the internet. Most of them refer to the reviews to gather knowledge about any particular company.

You might also read about the Rex Real Estate Reviews that give you the ability to understand the market positioning of the Rex business model.

So, in this article, we will discuss the significant flaws encountered in the Rex business model. Without further ado, let’s align them.

No services of listing homes on MLS

90% of the buyers buy such type of property that is sold through MLS portals. Suppose the buyer’s agent is pocketing the buyers at a 2.5-3% commission rate. They will also be recommended that house which is listed on MLS portals. So Indirectly, the Rex business model is shuttering and neglecting 90% of the buyer’s listing, which means lack of exposure to the listing.

There are a couple of specific reasons when you save with the Rex, when the house sold at 10% of the buyer’s rates and have no hired agent, secondly when you agree to the buyer to pay half of the traditional fees of their agent’s commission fees that lies between 2.5-3%

This type of chance is sporadic nowadays because people who want to sell their property on time hire the competent age to help them complete their buying process within some days. Buyers have only concerned with closing their deal, and in some cases, if agreed, they might ask you to minimize your selling rates.

Complicated team-based approach

Although we can’t take it as a severe flaw, it will prolong your listing process because they have great teamwork. If employee A shows the house to the buyer, then employee B will close the property, or employee c will evaluate the requests. They change different employees from time to time. This flaw must be considered because if there will be a single communication mistake between one employee to another, it may reach a misconception, directly affecting your listing. Sometimes due to this fact, there has been seen some significant decline in the date of closing the deal.

Cutting the buyer’s agent commission fees

That is the most prominent drawback of cutting the buyer’s agent commission fees as many buyers’ agents list their property through the MLS portals. If the REX Real Estate minus the buyer agent instead minuting the seller, then there will be no exposure to their listing. The buyer’s agent will avoid their listing to show buyers as agents are always interested in their commission fees. If they do not get this, they have no interest in your listing.

Final words

These are the major drawbacks of the Rex business model, but the CEO of Rex real estate brokerage firm is considering these facts and working on it. They are trying to upgrade their business model.

REX or traditional realtors?

According to REX, its agents have the lowest costs for the best services. Looking closer, you will discover that listing with REX has many downsides, especially when compared to standard realtors.

REX or traditional realtors?

The REX strategy turns away up to 90% of buyers

The most crucial disadvantage when listing with REX is that it lowers your supply of possible buyers by as much as 90%. Keep in mind that eliminating the buyer’s agent commission leads to REX’s savings. With realtors having commissions, such strategy means that:

  • You need to convince the buyer to pay an extra 2.5-3% to cover their agent’s commission
  • Selling to one of the 10% of buyers who don’t have a realtor

The chances for such scenarios to happen are slim. Dependable buyers work with real estate agents to protect their interests. Moreover, sellers pay for the buyer’s agent commission, so they don’t have any motivation not to collaborate with a realtor.

Moreover, buyers have to cover many closing and move-in spending, which doesn’t leave them much cash to cover the agent’s fee. Even if they have the money, most of them except you to take a lower sale price as they don’t pay the bill for their agent.

The customer service is risky with REX

With REX, you will collaborate with many REX employees and not just one agent, like you would with a traditional brokerage. In theory, the team-based strategy enhances productivity. However, the large team leads to all kinds of problems. More people will be part of the transaction, so the risk of poor communication and mistakes is high.

When you work with a real-estate agency, this won’t happen as the real estate agent will provide you with guidance and assistance from beginning to end. Real-estate transactions are complicated, and problems such as missing a deadline, submitting a counteroffer, or completing paperwork are enough to jeopardize a sale.

Last but not least, discount brokers such as REX won’t offer as much hands-on service as conventional real estate agents. Keep in mind that REX isn’t the only alternative to traditional realtors. There are many other ways to sell/buy a house. Feel free to check out your options.

What is it when selling with REX?

To some extent, listing with REX is supposed to be similar to selling with a standard brokerage. Your REX agent will provide you with assistance at every stage of the selling process. They will assist you for:

  • Professional photography
  • Pricing
  • Negotiating with buyers
  • Reviewing offers
  • Open houses
  • Closing coordination and logistics

The most important difference between selling with REX and a conventional realtor is that REX won’t list your property on the MLS. However, it will use targeted digital advertising for marketing your house to possible buyers with no representation.

The strategy leads to mixed results. On the one hand, the risk that your house does not attract buyers increases and your home will sell slower than if it was listed on the MLS. Also, the longer the property is on the market, the lower the chance for you to get the asked price.

Is buying with REX less risky than selling?

If you’re a home buyer, you can save some money with REX, but only if the house you’re buying isn’t listed by REX. In case of purchasing, you will be able to get a commission rebate of up to 1.5% of the sale price.

Many discount services provide home buyers with rebates. Please read all the fine print to check out if you qualify, as there are many terms and restrictions for the refunds. The REX’s eligibility restrictions aren’t the only factor coming into play. Mortgage lenders’ policies and state regulations can also reduce your possibility of getting a commission refund.

What happens if you want to buy a house from a REX seller? For once, you won’t be eligible for REX’s rebate. Due to REX’s strategy, the seller will expect you to purchase the house without an agent or cover yourself for the agent’s commission. Having said that, purchasing right from REX doesn’t come with benefits but rather with many downsides.

Is buying with REX less risky than selling?

Are there any benefits when working with REX?

Compared to traditional real estate brokerages, REX Real Estate does come with some benefits. However, you should always think twice before signing and weigh in the risks.

You can save money…if it works

REX’s model has risks, but if it’s successful, you will save money on realtor fees as you avoid the buyer’s agent commission. For example, if you sell your home for $1million, you will pay $30,000 less than if you would cover the 3% commission of the buyer’s agent.

However, the company’s strategy isn’t always successful. Savings are significant, though, when everything goes as planned.

Solid commission rebate for some buyers

If you purchase a non-REX home with a REX agent, you can gain a commission rebate of up to 1.5% of the purchase price. You can use the savings for the closing spending and upfront spending when you purchase a home.

REX agents offer in-person support

One of the differences between REX and the alternative is the in-person support from REX every step of the home-selling process. With today’s technology, realtors can manage several aspects of a real estate transaction remotely. However, you want your real estate agent to come along in many situations such as:

  • Hosting open houses for possible buyers
  • Offering advice on how to stage your property to make it more appealing to buyers
  • Visiting your home to help you determine the best list price


Frequently Asked Questions

How does REX work?

REX tries to cut down your spending on commission as it eliminates the buyer’s agent fee. It will market your property right to buyers with digital ads and not post it on MLS (Multiple Listing Service). If REX identifies a buyer without a realtor, you won’t have to cover the buyer’s agent commission. However, 90% of buyers have a realtor, which leads to spending higher than anticipated.

Is REX Real Estate legit?

REX Real Estate is a legitimate discount real estate brokerage with licensed agents. How REX creates savings isn’t safe, though, can cause you money loss in the long run. You can find alternative companies that have lower commissions than REX and have fewer risks too.

Where is REX located?

Not all home sellers and buyers can benefit from REX’s model. At the moment, REX Real Estate isn’t available in all states across the U.S. California, New York, Georgia, Nevada, Colorado, Arizona, Virginia, Texas, and Oregon are some of the states where REX is available.

How much does REX cost?

REX has a flat 2.5% listing fee that covers both sides of transactions. As a result, this is the only fee that sellers will have to cover. However, this is true only when REX can find a buyer without representation. According to REX’s customer reviews, that’s rarely the case.

Does Zillow own REX?

Zillow and Trulia are members of NAR, which isn’t the case for REX. Therefore, Zillow doesn’t own REX. REX’s listing goes into the “other listings” tab, together with people who sell their homes “For sale by owner” (FSBO). The category also includes homes listed by agents who aren’t NAR members.

About Amanda

I love to buy a lot of products for the home, and dissect them out. I split them into duds and winners, and share the findings here on my site. As a reader of my site, I'm aiming for your next purchase to be an informed and inspired one.

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