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Real estate site Redfin files for IPO

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Re: Real estate site Redfin files for IPO

#31

Post by soVeryTired »

wyc wrote: post #10
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?

Buying a house is among the largest purchases of many peoples' lives. It could be worth the $5,000-$50,000 (~6% of value in U.S.) for the piece of mind. People are used to using realtors. I don't think enough economists and business people give culture enough credit for its impact on businesses and finances. It's common enough that if the buyer tries to make direct contact with the seller, all parties are startled an…

I'm pretty sure purplebricks in the UK are flat-fee.

Re: Real estate site Redfin files for IPO

#32

Post by toomuchtodo »

ferentchak wrote: post #25
toomuchtodo wrote: post #16

Earlier quoted context omitted.

"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.

In my most recent homebuying experience, my realtor was able to point out several facts about the house based on the surrounding market that saved me about $40k. It also helps that I don't pay for the realtor on the buy side.

What's your argument against a good realtor who saves you any amount when it's coming out of the seller's fee?

Edit: By the time you've come to visit a home you're buying, the seller has already agreed to the commission percentage with their agent. The money is already spent.

Re: Real estate site Redfin files for IPO

#33

Post by Danihan »

bkjelden wrote: post #12

I hope this company sees nothing but success. I bought my house through Redfin last year, and not only did I save ~$5k in commissions compared to a conventional realtor, I also felt the process was much smoother and more pleasant than other times I've interacted with a conventional realtor. It's simply absurd that in an era where any buyer can view photos of a house for sale online real estate agents still expect to…

Well, technically the brokers get most of that.

Re: Real estate site Redfin files for IPO

#34

Post by goshx »

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 agree. I've been waiting for this disruption for a while. In the past 5 years all the realtors I had to interact with had to do was to open the property I found and later prepare the documents and tell me where to sign and who to pay, and obviously collect a good chunk of money every year for rentals and the % for sales. Every time I needed their help for something I wouldn't get.

I can't see how that could not been replaced by a system of some sort.

Re: Real estate site Redfin files for IPO

#35

Post by Danihan »

vadym909 wrote: post #27
dpark wrote: post #15

Earlier quoted context omitted.

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%.

How does a web site get licensed as a real estate broker, anyway?

Re: Real estate site Redfin files for IPO

#36

Post by bradly »

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.

In my experience a good realtor will either save you 3% when buying or get you an extra 3% when selling by knowing the area, knowing the right improvements to make, home staging, and negotiating.

Re: Real estate site Redfin files for IPO

#37

Post by paulgb »

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…

Isn't that basically what SaaS is? Companies that would have had to hire engineers to do bespoke work can contract out to a SaaS vendor and get what they need for a fixed fee.

SaaS doesn't make sense every case, just like Redfin doesn't, but it's still valid.

Re: Real estate site Redfin files for IPO

#38

Post by strict9 »

Bought my house via redfin and very satisfied with the process. It's also a bonus for buyers, they send you a refund check for a portion of the commission that normally all goes to agents.

Their agents may have less experience or knowledge, but as long as you get highly rated/reviewed service providers (lawyer/inspector/etc), that's all that matters. When I sell my current house it will definitely be via redfin. So much is now done online, why pay high commission to traditional realty companies?

This is indeed an industry ripe for change, and redfin is definitely doing just that.

Re: Real estate site Redfin files for IPO

#39

Post by bdamm »

maguirre wrote: post #8
debacle wrote: post #2

Having worked in the real estate industry for a time, it's ripe for disruption. Redfin is going to have a problem when it paves the way for a flat rate competitor, but right now it's doing a massive service to buyers and sellers.

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

I think buyers could brave buying a home without a realtor. It's a little crazy but doable.

Selling is another matter entirely. If you would like the peace of mind to know that your home is actually in your past once the money is in your bank account, use a broker. Having your past home haunt your future can be a miserable prospect.

Re: Real estate site Redfin files for IPO

#40

Post by jasode »

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 realtor [...] Why do we need realtors at this point? Everyone finds houses themselves online nowadays.

The need for realtors comes mostly from the sellers not the buyers. (Yes, some buyers also contract a "buyer's agent" but the point remains that realtors are still desirable to help market and show a home.)

Unlike the "dis-intermediation" that happened to travel agents (online flight/hotel booking), and librarians (google searches), or video rental clerks (Netflix), the elimination of realtors to represent the most expensive component in an owner's net worth is not going to happen because of a slick point & click housing website.

Consider that the vast majority of people don't even post their garage items on ebay for sale. Compared to that, selling a house is a much more complicated transaction. There's a categorization in sales called "low touch" and "high touch" transactions. A "low touch" transaction would be buying a loaf of bread from the grocery store. For the forseeable future (at least decades), selling homes will be a "high touch" transaction and sellers will want the reassurance and "warm & fuzzies" from another human middleman to help them fetch the best price. (E.g., the owner would presumably hire the appropriate realtor with the reputation and track record to quickly sell homes similar to his/her property.)

However, that doesn't mean more efficiencies can't be wrung from the system. Many think the typical realtor's commission of ~6% is way too high so it seems inevitable that entrepreneurs will revolutionize the market. Regardless of the new landscape (e.g. maybe no more MLS), the human intermediaries will still be there.

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