There’s still the debate on whether or not robots and artificial intelligence will take away human jobs. Some say humans will suffer; others say that’s madness. Well, it would seem as if the former is true since one real estate company is moving to rid itself of human agents.
Whenever folks want to purchase or rent a home, they tend to go through a real estate agents who explains to them the good and bad choices. That interaction between two people is paramount, but a company that goes by the name REX Real Estate Exchange doesn’t seem to believe two individuals interacting is very important.
All about cutting cost
REX is all about its bottom-line, you know, making more money by spending less. The company wants to use robots and big data instead of its current commission model where it pays real estate agents two percent instead of the regular five to six percent.
The company recently kicked off its Long Island operation. The company based in Los Angeles will soon list New York City homes on its website, rexchange.com.
Now, according to Jack Ryan, Rex’s chief executive officer, who was also a former partner at Goldman Sachs, real estate fees are “crazy high” when compared to other industries in the United States. This is the primary reason REX wants to do away with agents and replace them all with robots.
He went on to add that investment brokers in the past charged around 12 cents per share for stock trades, but these days, they are charging less than a penny. Now, by lowering real estate commissions, REX is basically “doing the same thing with residential real estate.”
REX is not the only company seeking to change real estate business
Here’s the thing, REX has so far raised over $16 million from investors, though it is not the only company with the intention of changing the sales model in the real estate market. EasyKnock is one of those companies, and it has recently begun to roll out its website designed to link buyers with sellers, and completely bypass the traditional real estate agent.
If a home sells for $300,000, brokers gain $9,000, and a portion of that amount goes into the pocket of agents. It’s a win-win for each party, but real estate companies do not seem to believe such is the case.
Americans still prefer human real estate agents
Most home sellers tend to seek out a real estate agent. Data from 2015 shows that 89 percent of all home sellers chose to involve an agent in their business, and that number is the highest since 1981, according to Adam DeSanctis, a spokesman for the National Association of Realtors.
However, things could change with the rise of big data and artificial intelligence. If these technologies prove just as efficient as real life agents, then the job market may suffer. It’s early days, though some might say the writing is on the wall.