REX pivots to single-family rental market as Hail Mary
Nearly two weeks after mass agent layoffs and the closure of two offices, controversial discount brokerage REX has yet to throw in the towel.
Nearly two weeks after mass agent layoffs and the closure of two offices, controversial discount brokerage REX has yet to throw in the towel. Instead of serving individual buyers and sellers, the Texas-based company has focused on institutional buyers in the single-family rental market.
“[REX’s focus is] the B-to-B side of the business, which is partnering with different types of single-family rental companies,” Lynley Sides, co-founder of REX and COO, told Real Trends, who announced the news on Monday. ” We help [single-family rental companies] find homes. We try to help them buy homes that are in their buy box.
“It can be a challenge for them to find homes to buy,” she added of the opportunity to delve into the single-family rental market, which has grown tremendously during the pandemic. .
Despite reports that REX has canned all of its agents and a significant portion of its support staff, including account managers, sales specialists and others, Sides said the brokerage has enough employees. to negotiate deals with institutional landlords in California and Florida.
The COO declined to share which owners they would work with, their current agent count and whether those agents will retain their W-2 status or be treated as independent contractors. However, she said the fierce legal battle with the National Association of Realtors (NAR) and Zillow has forced REX to take dramatic steps to stay afloat.
“I will say the Zillow event was significant and it was the driving force behind a drastic downsizing,” Sides told RealTrends.
Sides’ interview with RealTrends follows two weeks of damning news that led industry members to believe the brokerage was on the brink of destruction. May 11, the american genius signaled an impending shutdown after REX employees reported a second round of mass layoffs on LinkedIn.
“After 4 years as a remote account manager at REX immobilier, a great start-up experience, unfortunately they have made the difficult decision to close shop… so am looking for another remote opportunity if anyone needs me ! I have skills, just a hard and dedicated worker,” read the post of a former REX employee, according to a previous Inman article.
The layoffs coincided with office closures in Austin, Texas, and Woodland Hills, California. Seven months prior, REX had closed its offices in New York and Chicago amid a shocking announcement that it had started joining the organizations it had spent seven years avoiding – Multiple Listing Services (MLS). .
In a statement to Inman reporter Andrea Brambila, REX General Counsel Michael Toth said layoffs, office closures and other structural changes were “painful decisions” because of their battle year-long antitrust with NAR and Zillow after the portal began separating non-MLS listings. MLS listings on its site.
REX said the change negatively impacted traffic to its listings and violated antitrust laws. NAR and Zillow have filed a countersuit against REX; however, the court dismissed that lawsuit last month.
“REX was poised to disrupt the industry for consumers,” Toth said. “Unfortunately, as alleged in REX’s federal lawsuit, when Zillow and NAR agreed to protect their profits, REX’s innovative business model was sacrificed. The industry could not tolerate consumer choice. As a result, we We had to make many painful decisions.
Despite the beatings REX has taken, Sides, Toth, and CEO Jack Ryan have told Inman multiple times that they won’t back down from Zillow and NAR, and will continue to navigate their business options with recent funding from $10 million on their side.
The insurance company that underwrote the $10 million private placement bond, PIUS, declined to say whether the funding round had officially closed, but remained optimistic about REX’s trajectory.
“[We] stay confident in REX’s technology,” PIUS CEO Joe Agiato told Inman in a previous post.
“[The funding will] support REX’s continued business growth and market expansion, including both our technology platform and homebuyer services, as we pursue our mission to provide a direct-to-consumer real estate solution for individuals across the country,” Ryan said on May 19.
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