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Real estate site Redfin files for IPO

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Re: Real estate site Redfin files for IPO

#21

Post by dmreedy »

berberous wrote: post #13
ssewell wrote: post #9

Earlier quoted context omitted.

Isn't the main value of a realtor the ability to provide access to the home for sale, monitor the visitor, and provide insight in regards to the construction & quality of the home? I don't think most people expect the realtor to recommend random homes based on the buyers preferences, as most people use services, such as RedFin, to narrow down the homes that match their best fit.

And that's worth 3%? The issue with realtors is the exorbitant fees they still charge.

Have you ever worked with a realtor? The fee may seem exorbitant because you pay it in a lump sum. But if you were to try and calculate their hourly fee, you'll see even the mediocre ones who are only moderately attentive to their clients are often making only a few dollars an hour.

Re: Real estate site Redfin files for IPO

#22

Post by wyc »

Here's a great piece by Ben Thompson discussing the economics and markets of such services:

    Both limit growth: regular agents with a stake in the
    current system steer home buyers away from Redfin
    properties, and hiring and training agents who aren’t
    interested in the upside from commission takes a lot of
    time and money.
https://stratechery.com/2016/opendoor-a-startup-worth-emulat...

Why the flat-fee brokerage Allre had to close shop:

    All of these internet companies that profess to want to
    disintermediate the real estate business – just as they
    did with the travel agency business (everyone even uses
    the same analogy) – forget one major fact: buying and/or
    selling a home is often the largest, most complicated
    transaction a person may undertake.
https://therealdaily.com/editorials/allre-startup-thinks-imm...

Re: Real estate site Redfin files for IPO

#23

Post by bdamm »

notadoc wrote: post #3

I'm still waiting for someone to completely eliminate the realtor and charge a reasonable flat fee ($1000?) to buy/sell a house and handle all the related details. Why do we need realtors at this point? Everyone finds houses themselves online nowadays. Why does anyone need to pay a whopper commission to some middle-man?

Having gone through four home-buying episodes, where my wife (an ex-realtor) spent massive amounts of time trolling Trulia, RedFin, calling police departments, gathering reports from the local City Hall, I can tell you there is still a service to be provided by agents. And anyone who has bought a house knows that the collection of contracts that represents "buying a house" is not a small collection, and errors can be logistical disasters down the road.

A good agent is worth 10x their commission. A bad agent, of which there are many, is a waste of money. And the big rub is that people who could be buying homes probably aren't simply because they don't know the dozens of tricks that can be employed to make an unaffordable situation affordable, or able to identify a good deal.

If you're comfortable buying a home without any background check, then I guess you don't need a realtor, but I wouldn't do it.

Oh, and the laws that protect realtors, toss 'em. What we really need is Yelp for realtors.

Re: Real estate site Redfin files for IPO

#24

Post by ericb »

japhyr wrote: post #20
rhodysurf wrote: post #7

Earlier quoted context omitted.

I used to think the same way, but then I bought my first house and my realtor was insanely helpful. The entire process is filled with random quagmires that I would have never known how to manage otherwise. Someone with more experience may be more able to go it alone obviously, but my realtor was invaluable.

I agree. I live in a small isolated town, and I thought realtors were artificially increasing the home prices (not values, but prices) in the small pool of housing available here. But their local knowledge was invaluable in both buying and selling a home. That said, if a buyer and seller agree on a sale independently of any realtor here, we can go to a local realtor and they'll happily facilitate the sale for a flat…

You don't need a realtor, fyi, just a good real estate lawyer, which you generally need anyway when buying/selling a house.

A lot of the apparent value of realtors disappears when you do the process yourself. source: have FSBO bought, and FSBO sold, and redfin bought, and worked for Coldwell Banker.

Getting on the MLS is cheap/easy now with discount MLS listings--I wouldn't do fsbo without it, even though you usually pay buyer's agents.

Re: Real estate site Redfin files for IPO

#25

Post by ferentchak »

toomuchtodo wrote: post #16
notadoc wrote: post #3

I'm still waiting for someone to completely eliminate the realtor and charge a reasonable flat fee ($1000?) to buy/sell a house and handle all the related details. Why do we need realtors at this point? Everyone finds houses themselves online nowadays. Why does anyone need to pay a whopper commission to some middle-man?

"I'm still waiting for someone to completely eliminate the need for a software engineer and charge a reasonable flat fee to bolt together some libraries and handle all the related details. Why do we even need software engineers at this point? Everyone can find the libraries and open source tools they need online nowadays. Why does anyone need to pay a whopper paycheck to some middle-man?" You're paying for someone's…

I can see some of the expertise coming into play on the selling side.

Can you give me a few examples of what kinds of value one gets while buying?

From what I can tell the main service that my realtor offered when I buying my place was access to the MLS. We found the houses we wanted to look at and he gave us access. Dollars per hour he was doing very well working with me, although I might be an exception.

Re: Real estate site Redfin files for IPO

#26

Post by saimiam »

ransom1538 wrote: post #5

Redfin with its smaller cut of RE transactions on the seller side combined with the ability to circumvent MLS with it's own listing system could be the begining of the end for agents.

While I don't disagree with you, Redfin has been in business since 2004. 13 years is a long time to take to kill off realtors.

I'm in the process of selling my place and I'm using a realtor (who nearly matched Redfin's seller commission rate). The Redfin agent I first spoke to proposed a generic, templatized method to sell my property - list on N realtor sites, email my contacts, take nice pics - while the realtor I went with lives two doors down from me, knew the quirks of the HOA, had working knowledge of what potential buyers were looking for in my community based on recent deals he had been part of.

Re: Real estate site Redfin files for IPO

#27

Post by vadym909 »

dpark wrote: post #15
maguirre wrote: post #8

Earlier quoted context omitted.

seriously curious as I am about to pay 10k+ for selling my house. what are they doing that is so special?

Cutting the fees in half.

cutting the fees by 25% actually. Redfin acts as the buyer or seller's broker and only gives you back half of their 3% commission. The other side's broker still gets their 3%. So you pay 4.5% instead of 6%.

Re: Real estate site Redfin files for IPO

#28

Post by lighthazard »

japhyr wrote: post #20
rhodysurf wrote: post #7

Earlier quoted context omitted.

I used to think the same way, but then I bought my first house and my realtor was insanely helpful. The entire process is filled with random quagmires that I would have never known how to manage otherwise. Someone with more experience may be more able to go it alone obviously, but my realtor was invaluable.

I agree. I live in a small isolated town, and I thought realtors were artificially increasing the home prices (not values, but prices) in the small pool of housing available here. But their local knowledge was invaluable in both buying and selling a home. That said, if a buyer and seller agree on a sale independently of any realtor here, we can go to a local realtor and they'll happily facilitate the sale for a flat…

It seems the takeaway from all these comments here is that there needs to be more education in the home buying experience.

Re: Real estate site Redfin files for IPO

#29

Post by nihonde »

toomuchtodo wrote: post #16
notadoc wrote: post #3

I'm still waiting for someone to completely eliminate the realtor and charge a reasonable flat fee ($1000?) to buy/sell a house and handle all the related details. Why do we need realtors at this point? Everyone finds houses themselves online nowadays. Why does anyone need to pay a whopper commission to some middle-man?

"I'm still waiting for someone to completely eliminate the need for a software engineer and charge a reasonable flat fee to bolt together some libraries and handle all the related details. Why do we even need software engineers at this point? Everyone can find the libraries and open source tools they need online nowadays. Why does anyone need to pay a whopper paycheck to some middle-man?" You're paying for someone's…

I'm sure there are exceptions, but I've never met a realtor in the US that wasn't an outright impediment to an easy sale. For one thing, their incentives are usually adverse to one or both parties. Also, they're usually in the habit of pushing volume, and are lazy/terrible at marketing even the most compelling properties. They fail to grasp the fundamentals of customer service and fall back on scammy guilt trips and pressure sales tactics. Meanwhile, they're cutting every corner they can find.

In Japan, I had the opposite experience. Here, realtors worked really hard for me, and most of them are on a meager salary without commissions.

Re: Real estate site Redfin files for IPO

#30

Post by spelunker »

notadoc wrote: post #3

I'm still waiting for someone to completely eliminate the realtor and charge a reasonable flat fee ($1000?) to buy/sell a house and handle all the related details. Why do we need realtors at this point? Everyone finds houses themselves online nowadays. Why does anyone need to pay a whopper commission to some middle-man?

I was recently a first time homebuyer and my real estate agent was really helpful in basically holding my hand through the process.

He walked me through a contract to buy and sell, since I'd never seen one before. He helped me figure out a competitive offer for the house I wanted. He was able to spend time on things like searching for houses or setting up tours while I was working, it was great.

Just looking at houses online only scratches the surface of the homebuying process, IMO, and frankly with my full-time job it would have taken me much longer to find a house... assuming I would have even known how to get to closing, which I didn't.

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