REX is the latest startup hoping to upend the real estate transaction America?s housing shortage has made it harder for real estate brokerages to find inventory for sale, but one FinTech startup thinks it knows how to find houses before they even hit the market.
REX, a three-year-old startup co-founded by former Goldman Sachs partner Jack Ryan, processes user data (e.g. recent purchasing history) from third parties such as Google or Facebook with a proprietary algorithm to determine whether that person might be looking to buy or sell a house, and if so, serves users ads on different platforms in hopes of getting them to buy or sell through REX.
The company?s pitch has caught on enough that it?s expanding rapidly, as it hopes to join 10 new markets over the next year. It believes that by charging a 2 percent fee as opposed to a traditional brokerage?s 6 to 8 percent fee, it allows a buyer to buy at a lower price and a seller to sell at a higher price, even on the same house. ?That sounds like it makes no sense, that a seller can sell for more and the buyer can buy for less on the exact same house, but it?s because that huge fee of 6 percent is dramatically reduced,? Ryan said. ?So of course that becomes true. That?s what we?re doing.?
REX?s algorithm is also powered with artificial intelligence so it can refine itself in real time. If the algorithm serves someone an ad on Google or Facebook on the basis of a set of online behaviors and that person clicks on the ad, the...