REX Homes will stay alive by helping corporate landlords buy and sell homes.
REX, which stands for Real Estate Exchange, was founded seven years ago in Austin, Texas, and has been best known for paying agent’s salaries, offering consumers commission discounts and waging war on the National Association of Realtors.
Earlier this month, REX laid off most of its remaining employees. CEO Jack Ryan and COO Lynley Sides, who co-founded the brokerage, urged most agents to hang their sales license elsewhere, and closed physical offices in Austin and Woodland Hills, California.
But although it’s down, REX isn’t out, Sides said in an interview Monday. The brokerage has maintained its presence in Florida and California where it will continue to operate. Sides would not say how many agents remain with REX or address whether they are company employees or independent contractors.
REX’s main enterprise for now, Sides said, is “the B-to-B side of the business, which is to partner with different types of single-family rental companies.”
“We are helping them find homes,” Sides said of REX’s role in relation to the single-family rental companies. “We are trying to help them purchase homes that are in their buy box.”
For companies in the business of buying single-family homes to rent out, “It can be a challenge for them finding homes to purchase.” But REX, Sides said, has a remaining staff of employees who help such institutional investors buy homes, and, in some cases, resell them.
Amid a nationwide inventory crisis and skyrocketing prices, companies that buy up single-family homes face criticism for driving up sales costs.
The single-family rental lobby counters that its members make up just one or two percent of nationwide single-family rentals. Most investor landlords, they note, are “mom-and-pop” fixer-uppers and flippers who own just a few homes.
Sides would not name the single-family landlords working with REX, but she said much of the business was in Florida.
REX is one of the few brokerages of recent vintage to take on NAR, which has dues-paying member agents and brokerages. The company claimed the business model of employing agents as independent contractors drove up costs for consumers. REX’s agents were, in turn, salaried employees.
REX also fed the U.S. Justice Department information about NAR, which perhaps led to a consent decree between NAR and DOJ, and an eventually open-ended DOJ investigation into real estate commissions.
But the company faced internal criticism for not growing its business responsibly and not doing enough to communicate with employees. After a round of layoffs in the fall, REX was down to fewer than 200 employees, according to multiple accounts inside the company. Today, departed agents have said, no more than 40 workers remain with the company.
REX will continue to fight at least one battle with NAR: a lawsuit in Washington federal court in which NAR and Zillow are co-defendants. The case contends that by putting non-Multiple Listing Service listings in Zillow’s “other agent” category, the listings website and NAR effectively marginalized REX and other non-MLS participants.
“I will say that the Zillow event was significant and a driver behind radically downsizing,” Sides said.
Last week, REX told the court hearing the Zillow antitrust case that it hired David Boies, the veteran lawyer who represented DOJ in its antitrust lawsuit against Microsoft in the 1990s.