Home REX News Your Future Home – REX on Cheddar Live

Your Future Home – REX on Cheddar Live

by Eric Rothman
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How is technology disrupting the world of residential real estate? REX CEO and Co-founder Jack Ryan appeared as a guest on #CheddarLive recently to discuss how the company is using AI, machine learning, and big data to sell homes and save consumers money.

Ryan also discussed how REX is expanding its product offering and quickly becoming a one-stop shop for people who want to buy a home, sell a home, or get a mortgage.

REX has seen an increase in consumers looking for a digital alternative to traditional real estate, especially given how the process of buying and selling a home has gone unchanged for decades.

Transcription:

Baker:
Now the way people buy and sell a home largely hasn’t really changed in a lot of decades. You essentially hire a realtor and that helps you buy and sell your house. They use their contacts, they put that on the MLS and that gets pretty much the job done.

But new tech focus firms are looking to disrupt that system. So joining us now with a look at how they do that as Jack Ryan, founder and CEO of REX Real Estate. Jack, great to have you on. We loved your name, Jack Ryan, such a good one.

Jack Ryan:
I like Baker actually.

Baker:
You can take it, I’ll take Jack Ryan

Jack Ryan:
I hope it’s optimistic. It’s a fantastic name.

Hope:
True.

Baker:
Explain to our viewers how you guys have been able to automate the real estate experience.

Jack Ryan:
Well, it’s all about data today, right? In the old days that you described, I guess the current days for a lot of people, they put the home in the MLS and they hope people show up or go to Zillow and actually see it.

Now, we’ve put our homes on Zillow and Trulia too, but better, like every other great company today, has gone and find the buyer. Don’t hope they come to your website, go out and find them.

How do you find them? Big data. So the scary thing is, we know so much about you Hope or you Baker. We know where you probably live and your lifestyle decisions and if there’s new person in the house and who left the house.

And based upon all of that data, our computers can predict who is a likely buyer for this home, and then drop ads and you say, “Hey, why don’t you buy this home?”

Hope:
Now, also importantly too is the timing of it, that they will be ready. So when, so how does big data tell you when someone might be ready to get to the buying process?

Jack Ryan:
Well, there’s all sorts of things we do. Some of the things we call longitudinal data, which is your behaviors and how they change over time. So we’re looking at you over two or three year period of time and watching how your behaviors change.

And that change tells us probably you’re ready to buy a home. The other thing is, the thing that you do in a narrow window of time.

So if you do three or four things in a short period of time, like for instance, you’ve lived in your home for seven years, I child has left for school and you check the value of your home online and you bought paint … three times more likely than random, you’re about to buy a home.

So we can target you and say, “Here’s a home for you.” Especially if you know you live in a home that’s smaller than the one we’re selling. Or you need more space, because you just added a kid to the family. So we can target you based upon your behavior.

Baker:
But you’re feeling that’s where we’re moving to, that essentially down the road, if you’re buying or selling a house, it’s almost essentially going to be automated in terms of how you’re getting and selling your house?

Jack Ryan:
So we’ve gotten about 90% of the way there, but I think the last 10% requires computers to be emotionally intelligent. That’s a long way off.

So we still assign a human to talk to you before you list your house and then a human to help you with that last mile with escrow and title and the contract negotiation.

But 90% of it can be done digitally. I started at Goldman Sachs 25 years ago, and we used to have humans moving shares around, and that was electronic trading.

Baker:
Right. Totally.

Jack Ryan:
So I basically took the ideas we had a Goldman and bringing the Wall Street ideas to mainstream saying we can find buyers for these shares or these homes at 80% less cost. So we charge 2%, not 6%, and do it faster and better and cheaper. Just the way we did it in Wall Street when we started moving shares.

Baker:
But you do think customers who are wanting to buy a house, they feel like they’re getting the house of their dreams essentially this way. Anyway, it’s helping you guys from the business perspective.

But from the home buyer’s perspective, are they getting essentially a customized house that they know they’re going to like because of big data?

Jack Ryan:
Yeah, so we can help them. If we have a home that they want on our website, of course I’ll help them buy that home. But if they want another home, we can help them buy that home too.

And by the way, we’ll rebate half the fee back to them because we can save so much money for the big data collection we do. And we help with the mortgage, even help them move if they [crosstalk 00:03:18].

Baker:
Wow.

Hope:
I like that part. That’s always the hardest part. Where did this idea come from?

Jack Ryan:
Well, basically my experience at Goldman. Moving shares, we used to charge so much to move shares around. And then they had these things … well, you known this from your background, these things called the New York Stock Exchange floor brokers, they still exist.

Hope:
Yeah. Right.

Jack Ryan:
But most of us this just got done directly through big data and super computers. And in the end, the computers can be smarter about who is likely to buy up our shares, or for bonds or for now, homes. And that’s what we do. We applied that same technology.

Baker:
We know you’re in Los Angeles, where is REX used? Where can people use this?

Jack Ryan:
Southern California, and we just moved to New York. Long Island, Brooklyn, Queens. We’re coming to Manhattan. Austin, Texas in February. Denver in March. Other states soon. We’ll probably be nationwide within 12 months.

Hope:
And part of your business too is this idea of social good and building that into your mission statement and in the way that you do your business. Explain how that works.

Jack Ryan:
It’s such a key part of why we’re doing what we’re doing. So, this is going to sound like a man bites dog story, but when I left graduate school, I went to work in a refugee camp in South Texas.

And then when Goldman Sachs went public, I was a partner there. I wanted to teach high school in the South Side of Chicago.

And then I was thinking, how do we create wealth like we did at Goldman, then use that wealth to do good so we could fund refugee camps or help kids who didn’t have homes or schools?

And the idea was REX. And so everybody who’s joined our company has agreed with every 50 homes we sell, we build a home for someone who doesn’t have one.

And we’ve also put a lot of our net worth and the wealth we create, into a trust to help build homes and schools for kids that don’t have them.

Hope:
That’s so unique. I don’t hear this every day at all. So does this also help your bottom line though, being a company that has a social good focus?

Jack Ryan:
I don’t know if it does I think because we have that social encompass, but it helps our soul bottom line. I mean of course it makes us feel good about what we’re doing.

And then for our customers, they save a lot of money and they’re doing good too. I’m looking at your little …this actually is a New York/Boston idea right here, right?

The cheddar. Well the cheddar, because in New York and Boston they call money like cheddar. Right?

Hope:
Yeah.

Baker:
Yeah.

Hope:
So, we save a lot of cheddar for people and then we use the cheddar to help people who need homes or schools.

Baker:
Great network integration. We like that guys. While we.

Jack Ryan:
It’s right here from my space. Right here.

Baker:
Now while we have like just a little bit of time left with you, I want to ask, I mean I asked you earlier if you felt like down the road we’re going to have a essentially AI for all types of buying and selling houses.

Where do you actually see the future of home buying going?

Jack Ryan:
I think it will be mostly a digital, big data, artificial intelligence, machine learning process, but humans empowered by that.

So when we have some work to do in the buying side, it’s as a human helping you, but a lot of their suggestions or advice are given to you by a computer, but you still need empathy and sympathy and compassion.

And it may be that going through a tough time in your life when you want to buy this house. You want to talk about that as well as the house. So we still have humans interacting with you.

When you think about, is this right for my children? Is this right for the stage of life that you’re in? But most of that can be aided or helped or driven by AI or big data.

Hope:
With our robots, will we be shown around a house with a little robot?

Jack Ryan:
We have a robot in the house. Well, there’s probably 75 questions you can have about a house. And that’s about it. After some of those questions, you’re kind of done.

So you can train Watson or Siri to answer those 75 questions, now the trick is, there’s 100 ways to ask those 75 questions, right? Right. So you can say, does the house leak? What’s the condition of the roof?

Is that slate up there? Is there water damage? That all means what’s the condition of the roof? So you have to train the computers to understand that. But if you want on our site, if you want to ask the chatbot those questions, they can answer you or we deploy that bot into the home.

If you want to talk to human, talk to the human, they’ll give you the same answer. But just it’s more ways to make the experience very seamless, very easy, very smooth.

Baker:
More importantly, does the chatbot get the commission?

Jack Ryan:
Well, no it doesn’t.

Baker:
They get the software upgrade.

Hope:
It gets an extra charge overnight.

Baker:
Gets an extra charge. Really amazing, fascinating stuff where we’re seeing in the real estate industry going. Jack Ryan, he’s the founder and CEO over at REX Real Estate. Thanks so much for joining us.

Jack Ryan:
Thanks for having me.

Baker:
It’s a pleasure.

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