
Redfin shares surge more than 30% in $138.5M real estate tech IPO - apsec112
http://www.cnbc.com/2017/07/28/redfin-ipo-rdfn-stock-opening-trade.html
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jasondc
Looks like they're being valued like a tech firm, and not a traditional
brokerage.

What makes Redfin a tech company? Why couldn't prudential (or another
brokerage) build the same thing?

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mlinsenbardt
As a past customer, I would say they're somewhere in between; perhaps leaning
towards software. The process is highly automated, with 90% of the transaction
handled via the apps/web and most hand holding in the beginning and the end of
the transaction. While you are assigned an "agent", you will also work with
other random agents as you make requests and your requests are sent through
some kind of queue workflow. Further, their staff is paid a salary, not
commission as the traditional agent/broker. As a result, Redfin splits the
traditional buyers commission with you and you may use those funds towards
your closings, etc. I am a happy customer and would use them again.

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wcfields
Past customer as well. I found them to be exactly what I needed in the
competitive market of LA. I was already doing most of the research and finding
the listings I wanted anyway on the MLS. So why would I want to pay a
commission to an agent that isn't doing much for me anyway.

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jamroom
If you were buying, then you don't pay a commission - both the seller AND
buyer's agent are paid for by the seller.

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StillBored
Which is standard BS and I can't believe people continue to say this. Maybe
the seller would have accepted less if they didn't have to pay 6% (which can
be tens of thousands on the average deal these days). In the case of redfin
the buyer does _ACTUALLY_ pay less for a house since your getting a rebate
against the money your spending. Unless the seller is losing money on the
deal, it is the buyer that is effectively ponying up the cash to pay everyone
(in this case themselves).

I'm also a fairly happy ex-redfin customer, and I can't help but support them
if for no other reason than a number of brokerages around me are now creating
flat rate schedules to compete.

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delhanty
TLDR: my 2 cents - that 6% is ripe for disruption, so if Redfin have a
differentiator maybe that price surge is justified.

For letting, my experience of comparing Hawaii with the UK is that one has to
pay around 10% (plus misc charges) for decent quality full service let and
management for 12 month contract in both markets.

On the other hand, Which Magazine [1] (a bit like Consumer Reports in the UK)
has this to say on sales costs in the UK:

>Multi-agency agreement ... You'll pay a higher fee to go multi-agency -
usually between 2% and 3.5%. Given that any estate agent worth their salt will
list your property on portals like Rightmove, and being advertised several
times in the same place can seem a little desperate, it's probably not worth
paying the extra for this kind of contract.

>Sole agency agreement ... is the most common type of estate agent contract.
This is the same as sole selling (see below) with the exception that, if you
find a buyer yourself, you don’t have to pay the estate agent fees. The
typical estate agent fee for sole agency is 1-2%.

That is, overall 1-3.5% for the seller. It's unusual for the buyer to have an
agent in the UK.

In summary, letting costs are roughly the same in Hawaii and UK, but is _way_
cheaper to sell in the UK than Hawaii.

[1] [http://www.which.co.uk/money/mortgages-and-property/home-
mov...](http://www.which.co.uk/money/mortgages-and-property/home-
movers/guides/selling-a-house/estate-agent-fees-and-contracts)

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juddlyon
Redfin launched in 2006, I think we can quit calling it a start up (as the
CNBC article headline reads).

On a positive note, Redfin has a better UX than Zillow or Trulia. Hope they
continue to flourish.

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awkwarddaturtle
Redfin was a "hot name" during the tail-end of the housing bubble of the 00s
and there was even talking of them going public 10 years ago before the
financial crisis.

I can't believe it's been 10 years already.

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SamvitJ
"We are the Apple of real estate." could someone explain what this even means?

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mikeyouse
Per the video, the CEO was questioned about how they can attract real estate
agents to work with them even though they charge lower fees than the
alternatives.

Part of his pitch to agents was that they're very a very tech forward company,
so "[the real estate agents] are working for a brand that doesn't feel like
the Radio Shack of real estate, but feels like the Apple of real estate --
It's a good customer covenant, it's a great technology platform, and it's a
great career."

The pull-quote in the headline was never actually said or implied. He didn't
claim to be the Apple of real estate, just that his company is more tech
forward and employee-focused than the alternatives who feel like the 'Radio
Shack' of real estate.

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dmix
He could basically say "we're a modern tech companies approach to x legacy
industry" and would have gotten the point across. Saying "Apple for x"
communicates this to a mainstream audience.

It's interesting how just being tech-savvy, customer focused, and caring about
product design are such rare attributes that they are labeled as unique to
Silicon Valley and companies like Apple. It should be the primary objective
for the majority of non-low budget consumer companies.

But we're still recovering from the legacy of a price obsessed corporate
culture thats dominated since the 1980s run by accountants instead of
engineers. So it's not surprising that making an app and applying software
culture to any industry is seen as a revolutionary idea.

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andrewstuart2
Looks like a lot of people (more than they accounted for) are doing exactly
what I just did: "Who's Redfin? Let me check out their website." It seems to
be a little bit crushed at the moment.

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digikata
Aside from being crushed right now, Redfin has one of the better real estate
listing browsing experiences IMHO.

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rhizome
Though, like many things, it used to be better. Over the years they have made
obviously manipulative design choices that I can't imagine have anything to do
with facilitating purchases, and what I assume were/are driven by their
relationships with MLSes and the real estate profession in general.

But I agree with your implication that Zillow et al are worse.

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slg
Do you have any examples? I used Redfin years ago and was very satisfied with
it. I am curious what changed.

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rhizome
I usually use the map view with the sidebar list, and the picture gallery
there has shrunk, the map has also been shrunk. On a property's view page, the
map was moved way down the page. They also monkey around with the
listing/sales history. Lots of little things that accumulate in one's mind
over the years.

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mrfusion
I keep missing these ipos. Is there any way to get alerted a few weeks ahead
of time?

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empath75
Doesn't matter. In something like this, your purchase order would almost
certainly have not settled prior to the initial jump in price, unless you're
an insider.

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acchow
Not true. You can subscribe to the IPO through any major broker.

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tunetine
It was not on Fidelity's list of IPO's. Even then, you need to meet certain
qualifications such as $100k in assets sitting with them or being a member of
premium services who placed a ton of trades the past year.

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joshuamcginnis
I would keep a close eye on Compass
[https://www.compass.com/](https://www.compass.com/) in this space.

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supergirl
why

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joshuamcginnis
Like Redfin, they're taking a tech-driven approach to disrupting real estate.
They're valued at $1B, raised over $200M, have a stellar executive team, and
are building an impressive suite of analytics tools to give their agents a
competitive edge.

