Jay Thompson is a former brokerage owner who spent over six years working for Zillow Group. He’s also the co-founder of AgentLoop. He “selectively retired” in August 2018, but can’t seem to leave the real estate industry behind. His Inman column is published every Wednesday.

REX, the “discount” brokerage that shuns the MLS while filing lawsuits left and right, has allegedly closed down brokerage operations.

Maybe. Or maybe not? The company is uncharacteristically quiet, though in some ways, it makes sense not to fire out a press release about your imminent demise. So much for transparency. 

While the executives may be tucked away silently in a room with a view, the agents and support staff are actively looking for jobs according to several sources.

REX has often made headlines, though not so much for things brokerages tend to covet — sales volume, transaction sides, and agent count.

Instead, REX has gained attention for suing the National Association of Realtors, Zillow, and the state of Oregon. They may be involved in other lawsuits as well. To be honest, it’s hard to keep up with what seems to be the most active legal department in the real estate space. The number of lawsuits, countersuits, and appeals REX legal is wrapped up in is mind-boggling.

Toss in some click-bait fame for calling out “the real estate cartel” and blaming Zillow for “hiding” listings, and you’ve got a brokerage that many agents love to hate. I mean, there were actually agents defending Zillow over some of REX’s claims!

REX’s business model seems to comprise not putting listings into the MLS, and avoiding paying buyer agent co-broke fees, while riding the disruption train in the name of “changing the way people buy and sell homes.”

Other than former agents and staff looking for work, the only hard evidence REX has shuttered brokerage operations is the fact their corporate broker’s license in Texas is in an inactive state. (Licenses in Arizona, Colorado and Nevada are still showing as active in those states’ real estate licensing databases.)

You can’t broker real estate without an active license. The fact that REX is carrying zero listings also provides strong evidence its brokerage arm has ceased operation. Other than this empty listings page, there is absolutely no reference on their website that they’ve ceased helping consumers buy and sell real estate.

This pegs the irony meter given REX’s proclamations that they’re all-in for the consumer. When do you plan on letting those consumers know you can’t help them?

REX still has money

In an interesting twist, just a few weeks ago, “Insured technology financing pioneer” PIUS announced the securing of $10 million in funding for REX, with an accordion feature that provides REX an option for an additional $35 million. After the news that REX’s brokerage operations might be spinning into oblivion surfaced, Inman reported that Joe Agiato, PIUS’s CEO, told Inman, “PIUS performs an in-depth assessment of a company’s technology and IP portfolio, and based on this, PIUS insures the value of the loan to provide greater amounts of capital at lower rates.”

Agiato said REX “is still operating, albeit on a smaller scale. PIUS remains confident in REX’s technology, which is the basis of our financial relationship.”

Reading between the lines here, it sounds like this funding round is based on REX’s tech stack, and not its actual brokerage operations. A good thing because all signs are pointing to those brokerage operations no longer being in service.

What does this mean to the real estate industry?

Assuming REX really has shuttered its brokerage operations (and it would appear it has), the impact of that on the industry is negligible to non-existent. Another brokerage failed. So what? Not to sound callous, but it happens all the time. This isn’t a simple industry, and profit margins tend to be razor-thin. Success is never a guarantee.  

Although I’m not at all a fan of litigating your way to growth and profitability — and let’s face it, litigation seems to be a top priority with REX — I don’t like seeing any business fail. People need jobs, and the industry needs competition and new business models.

But in the grand scheme of things, one less brokerage in the mix won’t have any significant effect on the industry. The REX agents, many of whom I’m sure are stellar performers, can hang their license with another brokerage literally in minutes.

The only thing REX has fessed up to during this news cycle is that their antitrust legal pursuit of NAR and Zillow will continue. They’ve hired high-profile attorney David Boies to continue carrying that torch. I have no idea what Boies charges, but I bet he’s not cheap, nor is he doing this pro bono.      

Only time will tell what, if any, impact these legal gyrations may have. 

Should REX be shifting from direct brokerage operations to providing some sort of tech solution for brokerages (or consumers) then maybe that matters? Or maybe not.

It all depends on what that technology provides and what problem it addresses. Given that all anyone seems to know about REX is gleaned from copious legal filings, we can’t say what their tech stack may offer.      

I’m sure someday we’ll be hearing more from and about REX. If history is any indication, that will be limited to some lawsuit, countersuit or appeal. Who really knows, or cares, what else may lie ahead for them.

But wait! Hot off the press …

Less than an hour after I submitted this column to the Inman editors, more news broke about REX. And it wasn’t another lawsuit!

See Inman’s take at “REX pivots to single-family rental market as its Hail Mary,” and Real Trends breaking story, REX survives as facilitator for corporate landlords. Looks like REX has adjusted its focus to institutional buyers in the single-family rental market.

REX co-founder and COO Lynley Sides, and REX General Counsel Michael Toth are laying the fault of their brokerage failure directly on Zillow, taking #BlameZillow to whole new levels.

NAR must be to blame as well given they are co-defendants in REX’s lawsuit. I guess when in doubt, point fingers at anyone except who’s looking back at you in the mirror. 

Pivoting to helping institutional/corporate buyers of rental properties certainly won’t endear any agents to REX. I suspect those steering the REX’s ship through the storm couldn’t care less what agents think of this move.

There’s still nothing about the collapse of the brokerage business or this new direction mentioned on REX’s consumer-facing website. Thinking they must have issued a press release about this business model and customer base shift, I clicked on its site’s press page, and got a 404 Page Not Found error.

Ditto for the blog page. You can, however, still buy plenty of REX branded swag. Maybe the employee with the password to edit the website got laid off? Maybe REX thinks presenting a false front to consumers is OK. Maybe they’re just tired. Surely at some point, REX will let the consumer know they can’t help them anymore. Only time will tell.  

Will this pivot to help corporate landlords impact the real estate industry? Hardly. Institutional investors have been around since Day 1. They’ll still be around whether REX is successful with this new model or whether it meets the same fate as its brokerage operations.     

Jay Thompson is a real estate veteran and co-founder of AgentLoop living in the Texas Coastal Bend. Follow him on Facebook, Instagram and Twitter. He holds an active Arizona broker’s license with eXp Realty. Called “the hardest working retiree ever,” as the founder of Jay.Life, he writes, speaks and consults on all things real estate.