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Real estate site Redfin files for IPO

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Re: Real estate site Redfin files for IPO

#121

Post by abawany »

Balgair wrote: post #104
notadoc wrote: post #49

Earlier quoted context omitted.

> The entire process is filled with random quagmires OK, but why is that? And how many of those "random quagmires" are coming from realtors? The real estate industry reminds me of the tax preparation industry or car sales in the USA. My opinion is they are all (by design) intentionally annoying, cumbersome, overly complex, overly expensive, and excessively time consuming, seemingly for no reason other than to protect…

They usually come from City Councils, county boards, school levies, HOAs, insurance requirements on page 192.PGP.168, etc. that are changing all the time. Depending on where you are in the US, it really can be that bad very quickly. Ever buy a house? The contract you sign is literally thousands of pages of legalese that may or may not contradict everything else in it. The Real Estate Agents (REAs) give you 'cover' an…

In the 10 or so real estate deals that I have done over the past few years, I have to say that the realtor (even the exceptionally good ones) never pointed out any of the nuances of the perils related to the entities you mentioned above. In all cases, it was me, due to bad past experiences with HOAs for example, who was proactively demanding that I be given the HOA restrictions before making the contract; there were plenty of deals I walked away from when I thought the HOA was power hungry and ridiculous. EDIT: I am not dismissing the role of realtors - they had good tips that I use to this day. Here is one: start the homeowner's insurance purchase/quotes during the option period to ensure that any related surprises here will enable you to walk away during the option period than trying to deal with killing the deal with the much-higher earnest money amount at stake.

I have to say that the most insightful article I have ever read about realtors came from the controversial Freakonomics. It clearly outlined the separation of concerns and interests and made it clear to me that if a real estate deal is to work well, the only person responsible is me and me alone.

Re: Real estate site Redfin files for IPO

#122

Post by toomuchtodo »

hueving wrote: post #120
toomuchtodo wrote: post #110

Earlier quoted context omitted.

The hubris of this forum is astounding sometimes. Zillow and Redfin have attempted to automate just the valuation of properties (with enourmous resources behind them), and still aren't as accurate as traditional appraisers. It's easy? Edit: Even Zillow agrees. There's a million dollar prize if you can do better. http://www.marketwatch.com/amp/story/guid/D24B68EC-4090-11E7...

If you don't know the difference between an appraiser and a real estate agent, you should stop commenting in such a condescending tone.

Fair point! A realtor can still walk a property to perform a market analysis, which is still more accurate than an automated valuation.

I'm exhausted by the never ending comments here "it's easy! Anyone can do this!" when it's clearly not. I'm simply countering the disingenuity, whether the source is ignorance or arrogance.

Re: Real estate site Redfin files for IPO

#123

Post by hueving »

gist wrote: post #102
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…

Agree. But you are wasting your time on HN arguing those points. On HN (many) people are curious, think they rise to a challenge, and think they have the time and bandwidth to defeat any obstacle or achieve any goal they want. And are additionally willing to DIY it just for sport. The shocking thing is how little they understand how 'normal' folks operate. Wanting simple, easy and not necessarily having either the ti…

The problem isn't that real estate agents are offering the service, it's that you're pretty much forced into using it.

Re: Real estate site Redfin files for IPO

#124

Post by paulddraper »

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 recently bought from someone selling through Homie. https://www.homie.com

About $1000. Initial couple hundred to take pictures, put up a nice sign, and list your house. The balance is paid when you close. Scheduling viewings and offer submission is done through their site. They also offer legal advice.

The only really nice feature they lack is HelloSign/similar integration for the paperwork.

Re: Real estate site Redfin files for IPO

#125

Post by mediaman »

jhulla wrote: post #81

Good for Redfin. Disruption in any business that charges 6% transaction fees is great. Having said that, real estate transactions are complex beasts with many moving parts. A lot of this process can be scripted and templated. But there are many situations where it cannot. Buyers and sellers are under immense stress as they face very large financial and legal decisions. They don't understand the process, the terminolo…

I think people should generally have professional help in buying or selling a house. But the rates that brokers charge is out-of-step with the help they provide.

For example, in a $600,000 house in an urban area, the two brokers earn $36,000. But I just bought a house without a broker, and hired a real estate lawyer. Not only was the lawyer much more versed in legal details of the transaction, but he wound up charging me $500. Yes, he didn't drive out and hold my hand, but he was extremely knowledgeable and knew exactly what to look out for in all steps of the transaction.

In my experience, whenever the question of broker commissions comes up, people come out to defend the expert advice of the real estate agent and argue that people shouldn't "go it alone" because the transaction is complex. And, generally, it's true that people probably should not go it alone on an expensive transaction such as buying or selling a home. But the agent's advice is often mediocre, and they still lack the detailed understanding of real estate transaction rules and law that a real estate lawyer provides. So why pay the agent thirty times as much as someone with more experience and formalized, specialized education in the area? The only remaining reason is "marketing", which is the service that is greatly devalued in the age of online brokers.

Re: Real estate site Redfin files for IPO

#126

Post by opo »

ericb wrote: post #111
opo wrote: post #62

Earlier quoted context omitted.

>You don't need a realtor, fyi, just a good real estate lawyer, Lawyer prices will obviously be different in different parts of the country, (so maybe a lot cheaper where you are) but I knew someone who arranged a transaction without a realtor and paid a lawyer a lot more than $1,000 to put together all the necessary documents. One thousand seems like a good deal. >...which you generally need anyway when buying/selli…

A house sale is really a large contract agreement with a number of finer points. The legal fees were maybe $750 - 1200 but memory is sketchy on that. There are filings necessary with the state and other items that make it legal, and at least in Massachusetts USA, it is a lot different than say selling a mountain bike. Banks need certain info for loans, there's the deed, etc, inspections, etc. When you are signing you…

I agree it would be a bit risky to buy/sell real estate without any outside help. My point was just that if you are already using a realtor, it shouldn't generally be necessary to also hire a lawyer.

Re: Real estate site Redfin files for IPO

#127

Post by notyourwork »

jhulla wrote: post #81

Good for Redfin. Disruption in any business that charges 6% transaction fees is great. Having said that, real estate transactions are complex beasts with many moving parts. A lot of this process can be scripted and templated. But there are many situations where it cannot. Buyers and sellers are under immense stress as they face very large financial and legal decisions. They don't understand the process, the terminolo…

I guess my question is why is it so complex? What complexities arise that realtor's can help with.

Re: Real estate site Redfin files for IPO

#128

Post by jpmattia »

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?

> Why does anyone need to pay a whopper commission to some middle-man?

Not just a whopper commission, but a commission that causes the buyer's broker to be absolutely incentivized against your interest as a buyer.

What a throwback to earlier economic times.

Re: Real estate site Redfin files for IPO

#129

Post by jasode »

MichaelGG wrote: post #118
toomuchtodo wrote: post #110

Earlier quoted context omitted.

The hubris of this forum is astounding sometimes. Zillow and Redfin have attempted to automate just the valuation of properties (with enourmous resources behind them), and still aren't as accurate as traditional appraisers. It's easy? Edit: Even Zillow agrees. There's a million dollar prize if you can do better. http://www.marketwatch.com/amp/story/guid/D24B68EC-4090-11E7...

Don't professional appraisers actually go to the property and look around? As for the rest, why should the process of selling a house require "expertise"? Apart from inspections, which require domain knowledge of infrastructure.

>why should the process of selling a house require "expertise"?

At a fundamental level, one could say sellers don't require outside expertise to sell a home. Real estate agents are optional. There is a concept called "for sale by owner" which is a strategy some homeowners use. They can list the house on their own (not on MLS though), vet potential buyers, coordinate the showing of the home (appointments and/or open houses), etc. They can also get a real-estate lawyer to draw up contract papers, handle earnest money, etc.

However, most sellers do not want to mess with all the above. They literally do not have the "expertise" to do it all themselves. (Yes, the homeowners can sell a car on Craigslist but selling a home is a step change in complexity.) Hence, you end up with middlemen like real estate agents.

Some people think real-estate agents only exist because they have a monopoly on the MLS computer listings. That's not true. Even if somebody disrupted MLS database with Zillow listings, real estate agents would still exist. Selling a house is a complicated enough affair that intermediaries who specialize in it would always be a natural emergent phenomenon. The real economic question is whether they can keep charging 6% commissions as the internet evolves.

Re: Real estate site Redfin files for IPO

#130

Post by eric_the_read »

harrumph wrote: post #107
blocacres wrote: post #100

Earlier quoted context omitted.

I'm currently working on solving this problem, hoping to launch in the next year. The truth is the average real estate agent doesn't have a college degree and has been in the business for less than 3 years. And in a hot market, when houses sell in a week, the agent is worth even less. What marketing plan is going to sell a house in a week? None at market value.Furthermore, buyers are walking into transactions thinkin…

> What marketing plan is going to sell a house in a week? None at market value. Do not agree. Markets are only collections of people, and brokers know people, some of whom are buyers and a few of whom are the perfect buyers. Reaching those people is the marketing plan. Also, this is not buying airplane tickets, this is the single most costly and complicated process buyers and sellers will likely go through in their w…

Depends entirely on your market. A former co-worker sold his father's house for tens (possibly hundreds, I don't want to oversell this, but I can't recall for sure) of thousands of dollars over list in Denver in less than 3 days. If you count closing, it's definitely more than a week, but a contract was signed very quickly.
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