Scott Ball / Rivard Report
An increasing number of technology companies are turning their eyes toward the booming San Antonio real estate market.
REX Real Estate, an artificial intelligence- and big data-powered real estate brokerage, is gearing up for an Aug. 13 launch. The company is one of several recently that aim to take the real estate agent out of the home buying and selling process to cut down on costs.
Meanwhile, homegrown Brokerage Engine is taking a different approach: Rather than disruption, the software service aims to optimize the traditional brokerage-and-agent model.
Brokerage Engine and REX enter a housing market that's evolving, with startups such as Opendoor and Perch seeking to upend the tried-and-true process of listing a home with a real estate agent.
Those platforms aim to rid the homeowner or home buyer of the analog and in-person aspects of selling or buying a home. The app- and web-based services allow customers selling a home to input their home address, answer a few questions regarding their home, and receive an algorithm-generated offer based on comparable, nearby properties – none of which requires listing the home on the open market.
REX Real Estate will descend on San Antonio with about a half-dozen homes for sale. The company charges 2 percent in fees in lieu of a traditional real estate commission while skirting the multiple listing service, or MLS, entirely. Without having to pay the commission that comes with selling a home using MLS and hiring an agent, REX claims to be able to sell homes faster and charge 70 percent less than traditional brokerages.
“The computers are taking the robotic behaviors that humans have to do in these sales and taking the robot out of the human," said Jack Ryan, who runs the 3-year-old, Los Angeles-based REX Real Estate. "Humans are still needed for some of the emotional attachment to a house or the stuff that’s too complex for a computer to do right now. But the bottom line is that means we can sell the homes for 2 percent, not 6 percent, because we’ve learned to automate or maximize the advertising dollars to find the right buyer for your house.”
REX uses a combination of artificial intelligence and U.S. Census Bureau data to find a likely buyer for one's home. The licensed brokerage's technology scans for data on nearby homes in the seller's neighborhood and then pores over homes within a 5-mile radius that take into account the following criteria: homeowners with enough positive equity who can afford to buy the home, family size, and surrounding school districts.
Households are then ranked algorithmically from 1 to 1,000 on how likely they are to buy the home that is up for sale on the REX platform.
In March, the tech-powered brokerage launched in Austin. It has listed 40 to 50 homes and sold about a dozen properties, Ryan said. Since then the service has launched in Denver and San Francisco.
San Antonio appealed to REX because it's what Ryan calls an "aspirational market," where families try to create better lives for their children, and there is a lot of market activity.
“We like San Antonio because people are investing in homes, it’s entrepreneurial, and it’s growing," Ryan said. "And because there are a lot of buyers and sellers, it’s tailor-made for the REX model. … We just take the hassle away from you because the markets are very liquid.”
Rackspace co-founder Dirk Elmendorf and his brother Brett started Brokerage Engine, which has partnered with Kuper Sotheby's International Realty locally and also services an Austin-based brokerage. The company is providing a technological undergirding that the startup believes will make real estate brokers and agents more able to serve the market in a hyper-competitive environment.
"This is oftentimes people's most important buying or selling decision in their lives, and getting good service in that moment is really important," said Elmendorf, who serves as the company's chief technology officer.
Using a software-as-a-service model that charges customers a fee for using its software, Brokerage Engine provides a modern toolkit for real estate brokerages – ensuring that the agent gets all the paperwork done and setting up digital marketing tools. The system also determines how real estate commissions are distributed and provides analytical performance data to the brokerages it serves.
Elmendorf said Kuper Sotheby's expertise in real estate informs its software, and that's where the brokerage software platform can stand out from the pool of tech companies trying to disrupt real estate market.
"Everyone gets excited about the idea of disrupting something," he said. "The truth is right now the real estate market – the traditional brokerage – doesn't have modern tools to fight the fight. ... Disruption has an arrogance to it that if you're right, that's great, but otherwise, it's just kind of frustrating for everyone involved."