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REX survives as facilitator for corporate landlords

REX survives as facilitator for corporate landlords

Rex’s Homes You will survive by helping corporate landlords buy and sell homes.

REX, which stands for Real Estate Exchange, was founded seven years ago in Austin, Texas, and was known for paying agents, offering discounts on consumer commissions and waging war on National Association of Realtors.

Earlier this month, REX laid off most of its remaining employees. CEO Jack Ryan and COO Linley Sides, who co-founded the brokerage firm, urged most agents to suspend their sales license elsewhere, and closed physical offices in Austin and Woodland Hills, California.

Even though he’s down, Rex hasn’t come out, Sides said in an interview Monday. The brokerage has maintained a presence in Florida and California where it will continue to operate. The two sides did not say how many agents stayed with REX or address whether they were employees of the company or independent contractors.

Sides said REX’s main project at the moment is the “B to B side of the business, which is to partner with different types of single-family rental companies.”

“We help them find homes,” Sides said of REX’s role in relation to single-family rental companies. “We’re trying to help them buy homes in their buy box.”

For businesses that are in the business of buying single-family homes to rent, “it can be difficult for them to find homes to buy.” But Sides said REX has a number of employees left that helps these institutional investors buy homes and, in some cases, resell them.

Amid a nationwide inventory crunch and skyrocketing prices, companies buying single-family homes are facing criticism for increasing sales costs.

The single-family rental lobby counters that its members make up only one or two percent of single-family rentals nationwide. They noted that most landlord investors are “mother-and-pop” who own a few homes.

Sides did not mention the single-family owners who work with REX, but said that much of the work was in Florida.

REX is one of the few brokerages recently to take over NAR, which has paying agents and brokers. The company claimed that its business model of hiring agents as independent contractors increased costs for consumers. REX agents, in turn, were paid employees.

REX has also fed a file US Department of Justice Information about NAR, which may have led to a consent decree between NAR and the DOJ, and eventually an open investigation by the Department of Justice into real estate commissions.

But the company has 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’s headcount has fallen to less than 200, according to multiple accounts within the company. Today, departing agents said, there are no more than 40 workers left in the company.

REX will continue to have at least one battle with NAR: a lawsuit in Washington federal court where NAR and Zillow co-defendants. The case alleges that by placing non-multi-lists in Zillow’s “other agent” category, the listings site and NAR effectively marginalized REX and other non-MLS participants.

“I will say that the Zillow event was significant and a reason to scale back drastically,” Sides said.

Last week, REX told the court hearing Zillow’s antitrust case that it had appointed David Boyce, the veteran attorney who represented the Department of Justice in its antitrust suit against Microsoft in the 1990s.

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