Jack Ryan doesn’t pull any punches when he talks about disrupting the age-old business of buying and selling homes.
He’s the CEO and co-founder of Austin-based REX, an online residential real estate brokerage that directly markets homes to potential buyers without putting them on a multiple listing service.
REX charges sellers 2% to list their property on its website, opposed to a typical 5%-6% for both the seller and buyer agents.
“It’s been 6% for 50 years,” he said. “Despite the price coming down for services like taxi dispatches, travel agents, stock brokers — this one seems to magically levitate without any constraint by the law of physics.”
Ryan decried the roughly “trillion dollars over the next 10 years” that will be paid in commissions to residential real estate agents. His company, which operates legally as Real Estate Exchange Inc. and has raised more than $100 million in funding, is equally aggressive. Earlier this month it filed an antitrust lawsuit in Seattle against against Zillow, Trulia and the National Association of Realtors, calling NAR an anticompetitive “cartel.”
NAR and the other defendants have denied the claims in the lawsuit and the association said in a statement it was “an example of a brokerage trying to take benefits of the MLS system without contributing to it,” Axios reported.
Ryan is also co-founder with his wife, Amanda Ryan, of Blaze Kids Academy, a faith-based boarding facility and private school for orphans. Blaze is currently being constructed on ranch land owned by the Ryans in the Austin area.
“A real defining component of whether or not these kids in these under-resourced communities or in these situations do well is if they do have a caring parent at home,” said Amanda Ryan, who is executive director of Blaze.
Jack and Amanda Ryan were recent guests on the Texas Business Minds podcast. You can listen to the episode in the player embedded atop the story, or on popular podcast services such as Spotify or Apple Podcasts. Check out some excerpts from Jack Ryan below.
On pricing strategy: “Eventually we want to drive the price down to zero. … You’ll say, well how does the price get to zero, kind of like how it does with Robinhood or E-Trade or something? Because we help you with other things — we can help you with the mortgage, we can help you with the escrow service, we can help you manage your home. We started in the last three or four months helping people — you want to repaint your home? It shouldn’t be that you have to be in charge of your house.”
On how the REX model can make a difference in a red-hot housing market such as Austin: “Why is it always 5.5% to sell your home? Homes right now are selling, as you said, within three or four days in Austin. Why should you pay someone on a $400,000 or $500,000 home $30,000 when you merely put the house up on a website and it goes in two days? Does it make any sense that you, who invested in the house, who cleaned the gutters, maintaining it, took the risk, has to pay … 30% of the profits to an agent? Does that make any sense, especially when things sell so fast in Austin?”
On the buy side, it’s really competitive to buy a home. Once again they have that 6% fee baked in and they pay us part of that fee, REX, we just give you part of the fee. If you were saying, ‘Gosh, I’m in a competitive marketplace to buy a $300,000 home in Austin’ — well, would $5,000 help you? We really, literally cut you a check.”
On the future of REX: “We’re hoping to go public in the next year or so and hopefully we’re successful in doing that. The way we’re successful is when we keep producing the good numbers we’re producing.”
On growing Blaze (Ryan said all of the shares he has in REX will go toward Blaze): “Our first location is Austin … but the idea is, can we do more in Austin? Can we go other places? How about Amarillo? How about Dallas? Unfortunately, the demand for what we’re building seems to be, apparently, infinite. But we’re going to do all we can.”
Source: Austin Business Journal