
Real estate site Redfin files for IPO - realdlee
https://techcrunch.com/2017/06/30/real-estate-site-redfin-files-for-ipo/
======
bkjelden
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 receive 6% commission on
the sale of a house.

~~~
existencebox
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. As a result we lost out on houses when we could have been competitive.

Eventually we got a very solid realtor, who was aggressive in finding us
houses that would slip through our normal searches (the house we ended up
buying had been on the market for a long time at a higher price than they
eventually relisted it for, in an area we had discounted.) When a bidding war
started, he worked with us by being connected with the selling agent, gave us
very accurate hints on how we'd need to push and what would work to our
advantage, and landed both the deal and some back and forth that happened
after.

Downside, this was after 2 years of searching and losing out on houses I
frankly today still regret not getting. An hour+ commute sucks, and I
attribute some of my early failures to not getting an
experienced/knowledgeable/active realtor earlier.

YMMV but that's the caveat from my experience.

~~~
aetherson
I bought a house in SF three years ago through Redfin. The realtor that Redfin
gave us was prompt, aggressive, and thorough in the bidding/closing process.

What he didn't do is drive us around to open houses or suggest places to us.
Which we didn't want anyway.

I suspect that the individual realtor you get through Redfin has a big impact
on your experience with the site. It sounds like you got a bad one and were
unhappy. We got a good one and were happy.

~~~
IshKebab
This is really confusing. I just bought a house in the UK, and the process is
as follows:

1\. Look for house on Rightmove or Zoopla. 2\. Call the estate agent or
private seller to arrange a viewing. 3\. Show up at the appropriate time. Look
at house. 4\. Make an offer. Offer gets accepted/rejected/they want more.
Repeat until you get it or get outbid or give up. 5\. Offer agreed
(hopefully). Now do all the actual buying through mortgage brokers and
solicitors.

The estate agents charge the sellers a percentage, which is cheeky because
they do almost nothing - the only reason you should ever use one is if you are
incapable of taking photos or really can't spare a few evenings to show people
around the house.

But nobody ever drives you to see houses or finds them for you. How does it
work in America?

~~~
existencebox
I can only speak of hot markets in America, which are VERY different than many
others, but at least within that:

A "reasonable" house goes on the market. ("reasonable" defined by <1 mil,
within an hour commute of a city center) This house will usually be sold
within a week or two. Usually less. Definitely less, if it's actually priced
within middle-class-affordability (and I laughably define that as ~400-500k).
I've seen houses sell the day they listed. The selling process involves
showing up at the house during an open house (viewings are possible but rarer
in hot markets as typically it's a race to get your offer in and sellers know
they don't need to be accommodating; even viewing my house during the closing
process was a "if we can fit it in" sort of thing from the seller side) You
don't really get to "repeat". If you're very lucky they MAY tell you a
competing bid went over your escalation threshold, but for 80% of the houses I
put offers on, they look at the escalation guidelines and offers and just make
a choice right there. Typically at least someone has offered +50/100k in cash
and is going without a loan, so they'll often nab the house without a back and
forth with any of the other offers. If the seller agrees, the closing begins.
The buyer usually gets 1 shot to make an impression for a given house, usually
having to put the offer together within 12 hours/a couple of days max, having
seen the house once, usually with a bunch of other people.

A real estate agent helped me in multiple steps of the above.

\- Having an offer ready ahead of time with lots of contingencies/tradeoffs
well understood so we could tune it quickly and get it out and under the wire.

\- Knowing how and where to look for houses before listing, IMMEDIATELY after
listing, and that may have been listed ages ago/at bad prices.

\- Able to get us contacts with the sellers if an open house time won't
work/if we need to ask questions.

\- When our BOA agent left us high and dry, he hooked us up with a trusted
local lender with a good reputation and used his prior working relationship
with her to get our file pushed through in a ridiculous timeline over a
weekend so that we could put in a competing bid. (as I said, timelines are
nutso)

\- Gave us advice on what parts of our offer would have what impact, to what
sellers. e.g. 5k vs 3k vs 10k escalation steps? What other caveats? Should
compromise on preinspection? etc.

\- If anything went wrong, if we had followup questions, needed contacts, he
would be extremely accessible, would give us contiguous care (and thus knew
what our preferences were, what we were looking for, what offers we were
comfortable with/what our finances were) which saved time in rehashing that
every few weeks with a new agent; and given that you WILL lose most of the
offers you make, this process can go on a very long time so continuity is
nice. (we were on the market 1-2 years)

~~~
balls187
Did you look at areas that haven't been gentrified?

Plenty within 1 hour of Seattle that are affordable.

~~~
existencebox
That's more or less where I ended up buying, and managed ~400 for a
respectable 3b2b. That being said, the gentrification is spreading so
aggressively and was already well in place even when I bought; in the last
month 3 of my neighbors went on sale, all sold within a week at far higher
prices than comparable for when I bought. (I only had... 2 other bidders, if I
recall, when I bought, so it's certainly less hot than redmond where 10-15
competing was common)

------
notadoc
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?

~~~
toomuchtodo
"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 expertise, like in most industries.

~~~
jjppott
I generally have a different opinion. I am somewhat in the industry
(construction side) and I feel that generally most realtors dont really have
much knowledge of what they are selling. Furthermore, it is relatively easy to
get a real estate license (at least where I live) and the handful of
acquaintances that have gotten their license really dont know more than the
average person.

I actually find the lack of knowledge of most realtors very surprising (not
that there arent some really good ones out there). When we were working with
one to find a home, we would walk into a place and our realtor would look
through the listing sheet and be like "oooh they supposedly have a good
quality insulation in their walls", I would then need to explain to him what
an R value means and that no they truly didnt have good insulation and what
they were using as a marketing point was in fact the minimum required by code.
I would then point out a few other items (jump ducts, hollow core doors, etc)
that would make me feel like I was walking into a Habitat for Humanity type of
home, not a $600,000+ residence.

Buying a home is the largest single investment people are likely to make in
their lifetime and they have almost 0 knowledge about what they are buying and
do almost no research into it other than the location. They then rely on input
from someone regarding what they are buying that has very little additional
information other than comparable sales and "knowledge" of the market. I wrote
a business plan a little while around this, but never took past just putting
some ideas on paper.

~~~
bhandziuk
This is so true. Not only do they typically not know anything more about nay
given home that you, the buyer, do. If they are on the selling side they will
also outright lie about home features. I experienced this so many times on
houses I visited and even on the house I ultimately purchased.

You just have you shrug your shoulders and fix whatever they misrepresented.

~~~
jrs235
In my state you should file a complaint against that agent with the
department/office that oversees real estate licensing. And you might be
eligible to be compensated for the agents misrepresentations if you can prove
them.

~~~
bhandziuk
I'd love to. Some of the things seem difficult to prove. Such as

> Welcome Home!!! Take a seat on the PORCH SWING on your COVERED DECK and
> enjoy the Fall Season! Come inside this cozy home and view it's OPEN FLOOR
> PLAN [calling this open floor plan is a big stretch], Original HARDWOOD
> Floors [and they are destroyed as a result. Water damage. literally cut
> through to put in a furnace in the basement in one place. Covered by a
> carpet in the living room and destroyed as a result] and FRESH Neutral
> Paint. Two bedrooms and a LARGE full bath [probably as small as it gets
> while still being a full bath] on the Main Floor with a SUNNY eat-in Kitchen
> and Conveniently located MUDROOM, additional bedroom/office in the basement
> [not legally a bedroom]. This home features Updated ELECTRICAL [in some
> places sure. Half the house is still crappy old cloth wrapped wire], Updated
> PLUMBING throughout, Living Room is WIRED for SURROUND SOUND, [broken]
> SPRINKLER SYSTEM and NEW Roof with a LIFETIME transferrable Warranty!
> Detached Garage has HEAT & A/C, Wired for Cable and LAN line [a CAT5 cable
> that terminates in the floor and is not accessible to be hooked up to
> anything because it's in the floor!], has Electric [electricity to the
> building no where near code because it is fed from two sources] and a HUGE
> Attic space to Provide LOTS of EXTRA STORAGE. This home has a Private
> COVERED PATIO in the back where you can relax and enjoy YOUR NEW HOME!

There was more in the listing than this but that's just the basic bio.

------
tabeth
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, etc.)

\- appraiser (you might not even be able to get a loan if the house appraises
for less than the purchase price, unless you can foot the difference and/or
waive appraisal contingency)

\- lender (unless you're paying all cash. some lenders have vastly different
interest rates they can offer you, given a credit score. this can save you 10s
of thousands).

Additionally, it doesn't really make sense. The realtor's value is not
proportional to the price of the home. Even if you believe a realtor is
extremely valuable, a house being twice as much in price wouldn't make them
twice as valuable.

Redfin is definitely an interesting step in the right direction towards fixed
fee realty.

~~~
gpawl
Same reason that app stores charge a 30% commission instead of a flat fee.
Prices are what the market will bear and prices are controlled by a cartel
that runs the marketplace (the MLS members)

------
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...](https://stratechery.com/2016/opendoor-a-startup-worth-emulating/)

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...](https://therealdaily.com/editorials/allre-startup-thinks-immune-
brokerage-laws-may-lose-main-partner-even-launch/)

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

Most of the article is about OpenDoor. I don't think that quote about Redfin
describes the situation very well.

I don't think there is evidence that agents with buyers steer them away from
Redfin and it wouldn't work very well since almost all buyers will go to a
site with MLS listings and see what is on the market. Redfin takes a lowered
commission on their business, they don't lower the commission to the buying
agent.

In terms of hiring, they allow agents to get away from the continual cold
calling/door knocking and self promotion they need to do to attract the next
customer and they offer a stable salary and a support staff to take care of
the mundane stuff like arranging inspections, etc. I don't think they have a
problem getting job applicants. (Not associated with Redfin, but a happy
customer.)

------
htedatsu
I had a superb experience with them in 2012 despite being a nightmare
customer. Chose Refin because their blog was so good. I bought a 2nd house in
the same neighborhood. It started out odd because part of their onboarding is
asking "Where do you want the check sent?", because, you know, you save so
much using them. I knew it would be fake but whatever. (It wasn't--I did
indeed get the $10K check almost immediately upon closing.) Problem is that my
bank thought I was a terrorist, despite the fact that I have literally 12
accounts with them (several businesses, savings, checking, etc.). I put down
20% on an $890K loan. My income is closer to $800K than $500K and my other
house in the neighborhood was already paid for. The simple act of moving the
$200K into an account ready to write the check spooked the bank and they
literally treated me like a terrorist. Suddenly everything took infinite
amounts of time to handle and resulted in triple the usual paperwork. It was
excruciating.

The bank (Bank of America, of course) caused so much trouble that I finally
decided to pull out and lose my $20K earnest money. (I had chosen B of A on
the theory that they already knew all about me, and also because they offered
a killer ARM.) The mortgage officer literally quit his job over his bank's
bungled handling of my sale. Somehow they came through, by this time, 3 months
after I had made the offer. I was actually paying $100/day to the sellers
because at this point they had moved out and were in a hotel and weren't able
to close on their own new house.

Anyway, my agent at Redfin was a champ, even when I told her I was quitting.
So she had way more trouble than a full-service agent with none of the upside.
The whole thing on Redfin's side was precisely as advertised.

------
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.

------
biastoact
I bought through Redfin five years ago.

Actually, we offered on two houses, backed out after poor inspections, and
then purchased the third house in a competitive multi-bid environment all in a
few months. With Redfin I never felt the kind of sales/relationship pressure
to close a deal that I did when buying with traditional realtors. The only
reason we didn't sell our Condo through Redfin is I wanted someone in the
neighborhood who could help coordinate painting, staging, etc in the lead up
to the listing.

All and all a great experience.

------
jdross
Having completed thousands of home sales at Opendoor, I believe a system will
works better for most home sales, but local expertise works better for high-
end homes.

An agent always make you feel like their differentiation matters. Redfin
advertises their refined process across thousands of homes to sell faster for
more money. Your neighbor advertises their local expertise and awareness to
get you an edge.

We joke that real estate is like politics – Everyone hates real estate agents,
but loves their real estate agent.

~~~
probe
Does Opendoor primarily work with high-end homes or your "average" home
(relative to the area of course)?

Also thoughts on Ben Thompson's analysis on your company
([https://stratechery.com/2016/opendoor-a-startup-worth-
emulat...](https://stratechery.com/2016/opendoor-a-startup-worth-emulating/))?

~~~
jdross
Our average purchase price is in the low 200,000's. We work with the middle
80% of homeowners.

Huge Ben Thompson fan, and waking up to his analysis that morning was a joy
and big surprise.

Rob Hahn has also done some solid analysis on his blog: [http://www.notorious-
rob.com/2016/12/forest-for-the-trees-op...](http://www.notorious-
rob.com/2016/12/forest-for-the-trees-opendoor-edition/)

------
africajam
Realtors have for the longest time seen other realtors as competitors. Its
time they recognise that the true competition is from large sites like Redfin
that will use tech to gain an advantage over them.

I realised this after several conversations with realtors about this open
source project I've created to help them build decent websites:

[https://github.com/etewiah/property_web_builder](https://github.com/etewiah/property_web_builder)

Most of them figured if it was open source then any of their competitors could
use it and be just as good as them. They would say this even if they
recognised that my product would give them a better website than they
currently had. Pretty strange way of thinking if you ask me....

------
msielski
Some food for thought: "The future of employment: How susceptible are jobs to
computerisation?"[1] which has been discussed on HN previously, lists
"Appraisers and Assessors of Real Estate" at .9 probability of computerization
and "Real Estate Brokers" at .97. It's certainly not a solved problem, but
these two jobs are nearly at the top of the list (or bottom, as the list is in
reverse order).

[1] PDF:
[http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Futu...](http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf)

------
debacle
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.

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

~~~
bdamm
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.

~~~
mac01021
Why can't my attorney provide me with that assurance while he's taking me
through the closing process? What extra thing is the broker doing?

~~~
harrumph
>What extra thing is the broker doing?

The broker is causing the closing to happen by finding and satisfying the
buyer along with the buyer's many, many issues with most properties.

------
paulie_a
Disclaimer: After a decade of working in the real estate industry in various
aspects I will say it is a sh*t show of incompetence, laziness and greed.

While most real estate sites are bad, zillow is awful and Realtor.com should
be considered a crime against humanity. I have to say redfin seems "ok"

On that note I am surprised that redfin is missing basic marketing messaging.

------
1024core
I like Redfin, but I have a couple of qualms with it:

1\. They will tag a house as "hot" arbitrarily. The cynic in me thinks this
tag is for sale.

2\. They tend to hide information. I've seen houses come on the market, not
sell for weeks, go out and then come back in the market for a lower price. But
their "history" section does not list "price reduced"; they just pretend like
the previous listing never existed. For example, the house at 110 Steiner
Street (
[https://www.google.com/search?q=110+Steiner+Street&ie=utf-8&...](https://www.google.com/search?q=110+Steiner+Street&ie=utf-8&oe=utf-8)
). It came on the market, and now is nowhere to be found. But when it does
come back on the market, they will completely erase the history of this house
not having been sold.

3\. They allow you to filter with other criteria, but Walkscore is not one of
them. I have given them feedback several times, but no response.

~~~
everybodyknows
>2\. They tend to hide information. Redfin does this to comply with local MLS
rules. Zillow does not, so best to check both.

------
ransom1538
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.

~~~
saimiam
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.

~~~
vadym909
I agree. Realtors won't get killed- they'll just have their commissions
reduced. I've bought a house through Redfin which was easy enough, but used an
agent who agreed to Redfin level fees, but was much more knowledgeable and
better at selling my house. From dressing up the house, doing open houses to
following up with buyers, to negotiating. Redfin couldn't match him with their
inexperienced agents/helpers, high volume and cookie cutter methods that are
more suited to hot real estate markets where there's not much for realtors to
do.

~~~
GFischer
So the mere existence of Redfin has lowered their fees. Good for you :) and an
example of the market at work.

------
theprop
Redfin is a big pile of nothing. It's a glorified real estate agency which is
itself an anachronism or soon will be.

You can _easily_ find online or other brokers ready to "sell" your house which
just means listing it on the realtors' association multiple site listings for
1% or even a few hundred dollars. The realtors association still control
everything in terms of having all the data on homes for sale.

They could have some opportunity in giving buyers rebates i.e. having a 1-2%
margin for buyers which most agents don't give, mostly because it's a lot luck
to find a buyer than to represent the sell-side.

The idea that it's worth around 8x revenues...a low margin business as a real
estate agency is...is a stretch, though to be fair, their revenues are fast-
growing without that much of a marketing spend.

Not sure how their quarterly sales vary (seems like a lot in their
profitability at least) but their latest quarter was terrible with only $6 mn
in gross income on nearly $60 million in revenues and then $30 mn in operating
expenses.

They claim to have helped users buy/sell $40 billion in real estate last year
but showed just $270 mn in revenues which is something like .8% of that market
value (while it should be in the 1.5 to 2.5% range I think). Not sure why that
it is.

------
codebook
I am actively looking the house right now. And getting disappointed by Redfin
these days. Previously it showed listed price for sold properties but now it
has gone. Only sold price is shown. Not only this, but the property
disappeared from MLS then re-listed with higher price tag doesn't show
previously listed price.

Information should be transparent between seller and buyer but Redfin is
leaning to seller side at this moment.

So, I am using Zillow more frequently than before.

~~~
xenophon
I don't think that's true. If you scroll down to the "Property History"
section on any Redfin sold listing, you should see the full details for that
home, including list price, any price adjustments, and sold price. In some
markets, this information is only visible to logged-in users due to MLS
restrictions, so you may have to log into your account to view the data.

------
kevincennis
I had a positive experience with Redfin, but honestly feel like even with the
refund check, I still overpayed for their contribution.

I shopped online, went to open houses on my own, and Redfin basically just
contacted the seller on my behalf to present an offer. I'd be shocked if my
agent did more than a few hours total work over the entire duration of the
sale – though I liked him a lot, and he was super responsive the few times I
needed him.

------
everybodyknows
Guess how many California-licensed real estate _BROKERS_ Redfin employs? The
answer is here:

[http://www2.dre.ca.gov/PublicASP/pplinfo.asp?License_id=0152...](http://www2.dre.ca.gov/PublicASP/pplinfo.asp?License_id=01521930)

A total of six BROKERS. Helped out by 528 _SALESPERSONS_ , who have little or
no financial responsibility.

A curious fact that no RE agent or Realtor will tell you: Under California
law, the terms "real estate agent" or "Realtor" have no significance.

------
jhulla
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 terminology, the legal and financial consequences, etc. There are
local regulations and conventions that differ from region to region. E.g:
Check out the differences in who pays fees across counties:
[http://chicagotitletransfertax.com/](http://chicagotitletransfertax.com/)

Good agents absolutely earn their fees when uncertainty and complexity arise.
I suspect Redfin is seeking to carve out the part of the market that comprises
straight-forward, template driven transactions.

~~~
hammock
>E.g: Check out the differences in who pays fees across counties:
[http://chicagotitletransfertax.com/](http://chicagotitletransfertax.com/)

The complexities can be and already are structured in a table format? Seems
like a job perfectly suited for a computer, not a human.

~~~
jhulla
Sometimes transactions stick at the strangest places. For example, a buyer
balks at paying a final $500 fee allotted to him because he has hit his
financial stress limit - potentially killing the entire transaction.

Good agents are not just facilitating the transaction, but also acting as
friends/confidants/therapists for buyers&sellers - helping them make
responsible decisions. Good agents also come up with creative solutions to
complete transactions - this pops up often in resolving inspection
contingencies. Say there is some leakage discovered underneath a bathroom sink
with some cabinetry damage. The buyer is getting cold feet. What do you do?

------
haberman
I'm closing literally today on a house I bought through Redfin. It's my third
Redfin buying experience. Redfin for buying is great. Their website makes it
easy to look for properties and get alerts when properties you might like go
on the market. No need to pay a realtor to do that part.

I'm still not using Redfin for selling. When you sell, you're paying for a
salesman, and a salesman can make a big difference on how much you sell for,
IMO. Redfin will save you 2%, so the question you have to ask yourself is:
will a traditional agent make me 2% or more, compared with Redfin? I think the
answer is yes, they likely can.

~~~
BadCookie
Indeed. When I needed to sell a house in the East Bay, the Redfin agent wanted
to list the property for almost 20% less than it sold for. When I told her
that I thought she was pricing it too low, she looked at me like I was crazy.
The local agent that we ended up using instead (who had recently sold 3-5
houses in our same neighborhood) had a much better idea of what the house was
actually worth, and also paid to stage the house--which Redfin would not have
done.

We used Redfin to purchase that house, and our purchase experience was very
positive, but selling the house with Redfin could have cost us a bundle. It
would probably have been fine if property prices had not been rising so
quickly at the time, but regardless, I am a believer in the value of staging
which is a service not covered by Redfin's fees.

~~~
ghughes
> The local agent that we ended up using instead ... also paid to stage the
> house--which Redfin would not have done.

You paid for that.

~~~
BadCookie
Yes, but it seems you've missed my main point entirely. If I had used Redfin,
the house could have sold for $80-90k less than it otherwise did, whereas
using the local agent cost me perhaps $5-6k more. The smaller point that I was
making is that you often can't compare Redfin's fees to the local agent fees
without also knowing if the local agent provides staging services, and many of
them do. Granted, staging is only a couple thousand for a modest house (from
what I understand), but it's something to be aware of.

~~~
BadCookie
I would guess that Redfin's problem is retaining talent. If an agent can make
more money going off on their own, they likely will. The agent who helped us
buy that house was amazing. But, guess what, he isn't at Redfin anymore. It's
too bad. I love Redfin's site and want them to succeed, but perhaps they don't
do enough to retain good agents (or their model financially prevents it).
That's just a guess, though. Also, their agents may have to cover a larger
geographic area than other agents, so it's not possible for them to be as
intimately familiar with particular neighborhoods.

------
sabujp
redfin maps + school ratings + real time alerts, and when I say real time I
mean I was in a house in fremont with my realtor and I got an alert during the
private viewing that the house just went pending, hah! In any case, this site
was instrumental in helping us find a house. RDFN is definitely going in my
portfolio.

------
aabajian
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.

------
Grustaf
Ah, so that's why it was name dropped on Silicon Valley recently...

------
skynetv2
i purchased my house thru RedFin and it was an amazing experience. Yes, a bit
more hands on than conventional realtor but you never know how much a
conventional relator was working on your behalf anwyay

------
andrewhillman
Coming from a background in real estate as an active broker who has worked
with Redfin agents, I'd like to point out a few things. Redfin's biggest asset
is their website. It's a good user experience and grabs them a lot of leads.
However, Redfin agents tend to be subpar agents when representing sellers and
or buyers. Most wouldn't survive in a regular brokerage setting. If I am
hiring an agent, I want a hungry service oriented agents, not someone who is
fine with receiving a salary. Discounts are enticing to consumers, but from
what I have noticed these discounts come at a cost to their clients. Rather
than list a bunch of examples, from what I have witnessed, Redfin agents are
not all that skilled in negotiating. They are actually horrible. Redfin needs
to train better but training is a multi-faceted issue. They need experienced
brokers who have been beaten up and have seen it all. I was lucky to have a
mentor who played a significant role in redefining the industry back in 2001.
Let's just say, nobody knew what the concept of Exclusive Buyer Agency was
during the late 90s. Anyway, in order to have great agents, they need to learn
from smarter battle tested agents in the office. An agent needs good instincts
to represent clients well. This takes time - 10,000 hours easy and they need
to see a lot of deal flow. You learn from the ugly deals, not the smooth ones.
Fortunately, for Redfin most Redfin buyers/sellers won't realize how good
their agent is until they have something to compare it to. Redfin does not
have top agents nor can the attract high-quality agents. In order for them to
succeed in the public market, they will need to increase fees because the cost
of maintaining and attracting talent isn't cheap. Discounting gives companies
a good chance to obtain market share. But market share will go down once they
raise fees. Historically speaking, discount real estate companies don't do
well in public markets. Let's look at one example of a company associated with
discounts, Zip Realty. I think they did an IPO in 2004 or so. Over the years
things didn't go well so they were forced to merge. Now, you might say, REDFIN
is different. This is somewhat true but I am sure if you read the Redfin S1,
you will see some of the concerns I have addressed.

This is coming from a non-traditional broker. I have always gone against the
grain. I believe Redfin will need to evolve a lot to get the public market to
embrace them. If I had to guess they will become a little more "traditional"
overtime.

I hope Redfin trains better and figures things out. Otherwise, they will need
to merge post-IPO.

Sorry for the long comment. I could write forever on this topic. I may do this
on my site when I have a couple of hours.

