Real estate site Redfin files for IPO • Hacker News Board

Re: Real estate site Redfin files for IPO

#291

Post by ryuker16 » Sat, Jul 08, 2017, 4:18 PM UTC

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…

The reason direct contact fails is due to the contract sellers repped by an agent sign: voiding the contract by going around they're back still is a fee.

It lasts 6 months or so...after it fails to sell, you should be good assuming they don't switch to another one immediately.

Some buyer agents might not want to deal with FSO though.

Re: Real estate site Redfin files for IPO

#292

Post by ryuker16 » Sat, Jul 08, 2017, 4:25 PM UTC

_m8fo wrote: post #108

I'm very interested in why many people believe a realtor should receive a percentage of the home's sale price as compensation but not the: - inspector (arguably a good one is more useful than realtor by pointing out foundation problems and other issues that can cost 10s of thousands) - attorney (again, arguably more useful. they can point out clauses and things like flood zone, unpermitted work, liens on the property…

Those guys make Bank on regular business unlike the sales guy who can have a bad month and earn zero.

Real estate agents as a model needs to go however for some folks, it's pretty good if they get a good salesman or buyer agent. I've dealt with a house dumper which is a nightmare as a seller but the best deal in town for a buyer(10-20% below market).

Before the internet, real estate agents were useful or needed so older folks are really hesitant to do for sale by owner.

Re: Real estate site Redfin files for IPO

#293

Post by pmikesell » Sat, Jul 08, 2017, 4:45 PM UTC

existencebox wrote: post #92

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…

Let me offer a different viewpoint. Redfin absolutely serves a purpose, but in some markets, notably for my case very hot markets, it's a significant impediment. I really wanted redfin to work, shopping in seattle 2 years ago. I tried for almost a year, but they would consistently be not as contactable or prompt as we wanted, and gave us very erroneous advice when it came to crafting offers on some houses we wanted.…

I had the exact same experience in SF. I really wanted to use Redfin, but it was just impossible. Every person we dealt with from Redfin was uninformed and unhelpful.

Finally went to a traditional local buyers agent who did a great job, showed us houses in different neighborhoods that matched what we wanted, and we finally closed after looking for about 2 months. The other interesting thing we noticed was that the houses we were seeing with the agent wouldn't show up on Redfin until weeks after we got to see them. I learned that one thing a good local agent can do is get you in to see stuff before it's officially "on the market".

Re: Real estate site Redfin files for IPO

#294

Post by edgyswingset » Sat, Jul 08, 2017, 4:52 PM UTC

fizixer wrote: post #152

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…

Let me guess, that ~$5k is less than 1% of what you would pay in total. No offense (and sorry for being off-topic) but I never get how people obsess over the under 1 or 2% cost savings while completely ignoring the overvalued principal. Two other examples, - People go over to buy a $50-$70k car and later boast how "they made" the salesman give them a $500 or $1k discount. (well what about a fully-functioning $20k car…

> No offense (and sorry for being off-topic) but I never get how people obsess over the under 1 or 2% cost savings while completely ignoring the overvalued principal.

Here's my counterpoints:

1. ~5k is enough to pay for two amazing vacations for me and my fiancee. I'd be enthralled to save that amount of money.

2. Correct me if I'm wrong, but it sounds like you're making the implication that people should instead be searching for cheaper housing. Easier said than done.

Re: Real estate site Redfin files for IPO

#295

Post by opo » Sat, Jul 08, 2017, 5:00 PM UTC

hijinks wrote: post #180

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…

I wanted redfin to work when we solf our house in the SF Bay area a few months ago. Redfin's issue is the selling agent was located 45 minutes away and just ran random comps and said our house was 120k lower then market. She said it would never sell for what I thought it was worth. So we ended up going with a local agent who put it on market for more then we thought and it sold for 1% over asking.

I used Redfin to sell a house and the realtor helped get the property ready for market (which took a while) and pulled multiple comps to help watch the market trend. Place sold quickly for much more than I thought it would.

Re: Real estate site Redfin files for IPO

#296

Post by opo » Sat, Jul 08, 2017, 5:56 PM UTC

notyourday wrote: post #143

Balgair wrote: post #104

Earlier quoted context omitted.

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…

> 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' and smooth out all bumps. Joan knows Frank on XYZ council, therefore you'll never ever catch any flack. That's why you pay for real estate lawyer to go with you to closing. That's the only person qualified to help you. It is the only person who repres…

You paid for a lawyer to go with you to the closing? Did they point out anything you had missed? (I've never heard of anyone doing that.)

Re: Real estate site Redfin files for IPO

#297

Post by aabajian » Sat, Jul 08, 2017, 6:06 PM UTC

To get rid of real estate agents: You have to find a way to create a free multiple listing service (satellite imagery maybe, looking for FOR SALE signs?). It's the MLS monopoly that has kept the real estate industry in the dark ages.

Re: Real estate site Redfin files for IPO

#298

Post by opo » Sat, Jul 08, 2017, 6:10 PM UTC

ericb wrote: post #136

opo wrote: post #126

Earlier quoted context omitted.

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.

The realtor and bank rely on the lawyer for your transaction and documentation. When I say "you need a lawyer anyway", even if you used a realtor, a lawyer drew up the docs for closing, and you hired the lawyer who put together the closing docs, although you may not realize it. You are paying the lawyer directly as a line item in your closing costs, so they are technically "your lawyer." Most people think the realtor…

>...This may vary by state/locale.

Yea might be different where I am. Like any signed document, I am sure a lawyer somewhere created the templates for the selling agreement, the purchase agreement, the loan documents and closing documents etc but I don't recall seeing any line item for a lawyer's time on any document nor did I ever talk to a lawyer. (Thank goodness for this as a real estate lawyer I know charges about 400 an hour. Fortunately there is nothing unusual about most loans/purchases/closings and lawyers don't typically have to get involved in each transaction - around here loan processors, escrow officers, etc actually do the work and they are much less expensive than a lawyer would be.)

Re: Real estate site Redfin files for IPO

#299

Post by ericb » Sat, Jul 08, 2017, 6:23 PM UTC

ferentchak wrote: post #56

ericb wrote: post #24

Earlier quoted context omitted.

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…

Do they make you sign a contract or can you put 3% discount for person to person sale? That way they are paying their agent if they decide to use one.

In the MLS listing, you put the amount of commission you are offering for buyer's agent. Then the real estate lawyer draws up the final contract with that included and it comes out of what you get. For direct person to person, I imagine you can just skip that part. If you put that you are willing to pay 0% commission, I think what will happen is that everyone who is actually relying on their buyer's agent to source houses to look at will not be brought to your property, as there is nothing in it for them.

You might lose out on a profitable bidding war, or the one customer who might buy the house coming through by doing that, but you might get an extra 2.5% if it works out.

Re: Real estate site Redfin files for IPO

#300

Post by TheSpiceIsLife » Sat, Jul 08, 2017, 7:37 PM UTC

cowsandmilk wrote: post #282

TheSpiceIsLife wrote: post #281

Earlier quoted context omitted.

I'm not sure I follow what's happening here. Doesn't the person selling the house pay the real estate agent? Why would someone sell their house for ~$5k less? This reads a lot like buying a vacuum cleaner at 10% off sale and thinking you saved 10%. Redfin helped sell the house at the price the market would bear.

When you buy through redfin, they pay you part of the commission they receive. For instance, in my neighborhood, there is a house listed for $294,000. Redfin states you would receive a refund of $904 if you bought the property through them. It doesn't scale linearly, so a $395,000 house has a $1,785 refund, nearly twice as much. It also differs by market. These are in Boston and thus are probably lower than other mar…

> there is a house listed for $294,000. Redfin states you would receive a refund of $904 if you bought the property through them.

People still fall for these marketing gimmicks. If the listed price is $294,000 with a $904 refund then the price is $293096.

The only reason I can find for listing it as two figures (list price + refund) is because it makes the buyer take longer to tell the story about buying their house. "I paid x but got a y refund" has more talking points than "I paid x".

Especially so if the "refund" is applied long after the transaction / settlement has occurred as it now compels you to tell the story again: "I just got my y refund from my house purchase!".

And the agency gets to maintain a slush fund of hundreds of thousands of dollars of pending "refunds".

Marketing.

I thoroughly disagree with these sorts of practices and personally believe they should be regulated out of existence. But people seem to love them, so there's that. And I'm skeptical that more regulation is ever the correct answer to anything. Perhaps.