“You want to limit the time you are exposed to the market. So if you can go faster, that’s better for you as a seller or buyer. Because REX is going around this traditional, clunky, slow process to buy or sell a home and matching buyers and sellers through big data and AI, that time that you’re exposed is much shorter.” – Jack Ryan, REX Co-Founder and CEO
REX Co-Founder and CEO Jack Ryan joined host Emily Chang on Bloomberg TV recently to discuss the future of the residential real estate industry, as well as the company’s successful raise of $45M in Series C funding.
Check out the full interview and visit REX to learn more about all the services offered.
What makes you think this is going to work?
Well, this test has actually been in business for three years. We’ve now upped over a billion dollars of homes listed and sold, so we’re doing really well and it’s been very well tested, and in fact, it’s been tested in other industries too.
Think about how you hail a taxi today or how you trade shares today. All the other industries have done this other than this industry. So it’s been very well tested and it’s working really well, and the benefit to the buyer-
MLS and of course Jack realtors have been not excited about startups going around them. Do you think that receptivity is changing?
Well, I’m not sure it’ll change with the residential real estate brokers, the traditional ones. It’s certainly going to change for the consumers. The consumers on average save $20,000. They eliminate a lot of paperwork. It’s faster. It’s smoother.
It’s all the things you’d expect when you bring AI and big data to an industry that really has been people driving you around in the car looking for that open house sign or something.
It’s just a much better way to sell a home or buy a home, sell bonds, buy bonds, the stocks, et cetera. It’s the same thing that most of your viewers who come from the financial sector are used to, just applying those same techniques to the financial services.
So give us an idea of the kind of volume that you’re doing. In the markets where you operate, what percentage of home sales are you getting?
Well, we’re probably listing now between five and 10 homes a day at this very moment. We just launched three years ago. We’re launching in 12 cities in the next six months, so the volumes are quite large.
It’s hard probably to find a company that has scaled as fast as we have in terms of the notional amount of transactions we’re doing. So we probably will list three to $5 billion of homes this year alone in just our third year of operation.
And what’s your outlook for the real estate market going into this year? We saw somewhat of a slow down at the end of last year, but nobody could really predict which way things were going to go.
The markets are fast-changing and hyper-local, which I’m sure makes pricing a bit difficult. What’s your view on trends in 2019?
Well, it is really hard to predict them. Anyways, this is why they ought to drive the fees down because this is kind of like… I noticed the passing of Jack Bogle this week.
Remember the load funds, the 6% load, you’d invest in a mutual fund, they charge you 6% to invest and that’s in a stock.
And that’s what happens in the residential real estate space. And this is relevant to your question in the following way.
When you reduce the fees to move shares or bonds or homes, then the whole market goes up independent of what’s going on in the overall market because the assets underneath those securities become more valuable.
As you drive down friction costs, the underlying values of those assets go up.
So I think residential real estate place markets are a great place to invest because as technology hits the sector, the underlying assets will keep going up independent of the macro effects impacting the industry.
So that said, how is that impacting your pricing strategies?
The market or our technology? I’m sorry.
The market in general, the capriciousness of it, the political and economic uncertainty that we’re experiencing right now.
So for us it actually helps us because on the buy or sell side, you want to limit the time that you’re exposed to the market. And so if you can go faster, that’s better for you as a seller or buyer.
Because we’re going around this traditional clunky, slow process to buy or sell a home and matching buyers and sellers through big data and AI, that time that you’re exposed is much shorter.
So on the buyer’s side, not only do we help you buy the home, but we help you with the mortgage, we help you with the insurance. We help you with the escrow, the title, all those other services and make it one-stop shops.
Your transaction is shorter. The shorter the transaction, the less risk you have to the market. So actually the volatility you’re referring to is actually really good for technology companies like ourselves.
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Here are some other articles you may enjoy:
- “Don’t be a mark” – How consumers pay the price for broken real estate industry
- “How REX is Remaking the Real Estate Process” – via Forbes.com
- REX Giving “Realtors a Run for their Money”
- J.D. Power Report: “Digital Disruption is Changing Real Estate”
- Diana Nelson, Chair of Carlson – Down to Business Podcast – Episode 3