Redfin IPO!

aquabliss

Well-known member
Argh, I totally missed this.  Didn't know it was coming or would have bought in this morning at $20 and would be up nearly 10%.https://www.google.com/finance?q=NASDAQ:RDFN

So what's the consensus now?  Too late and already missed the boat, or still has room to run?  I mean c'mon, 100's of TI users can't be wrong!  Or can they.

IPO closing day price: $21.70.  I hope in 1 year I'm not quoting this post when it hits $100.
 
I'll buy once the IPO frenzy settle down.  Even if it didn't, I probably will pick up some anyway.

Redfin is more popular and has better platform than Zillow and Trulia, lot of upside potentials. 
 
I'm with aqua. Can j buy and sell Monday?  What's the valuation now?
 
Definitely believe in them. Everyone uses it.

Just want to know if current stock price is in line so I can day trade this puppy. Lol
 
Soylent Green Is People said:

I remember when Redfin was just starting out in '07-'08 and Glenn Kelman was featured on the Lansner blog.  I made the comment that I liked their business model because it was going to put traditional agents/brokers out of business.  He really didn't like me saying that and promptly slapped me down in the comments, but basically that is the jist of the article linked above. 

Real estate sales volume is a zero sum game.
 
irvinehomeowner said:
Waiting for USC to tell us his prediction...

:)

Hasn't USC said that his rates are generally lower than Redfins and that his brokerage has very low fees which increases the amount available for him to pocket/kickback?

Everyone knows the 3%/3% model is dying, especially in areas like OC with high pricing and easy to move homes. My sig-other likes to watch a real estate show that claims every broker still gets 3% commission and never negotiates commission down as part of closing deals.. LOL
 
There are a few "6 percenters" out there. Quite a hefty pay day give OC pricing IMHO. Some are able to whittle commissions down to 4% however their rebate to the buyer are 100% of zero, even when double ending the sale. Smarter agents, and Redfin still do cut deals further into that 4% for both good will and ongoing referrals.

Here's part 2 of that article - still on whole a very good read:

http://www.notorious-rob.com/2017/07/the-impact-of-redfin-post-ipo-part-2-mls-associations/

My .02c

Soylent Green Is People
 
paperboyNC said:
irvinehomeowner said:
Waiting for USC to tell us his prediction...

:)

Hasn't USC said that his rates are generally lower than Redfins and that his brokerage has very low fees which increases the amount available for him to pocket/kickback?

Everyone knows the 3%/3% model is dying, especially in areas like OC with high pricing and easy to move homes. My sig-other likes to watch a real estate show that claims every broker still gets 3% commission and never negotiates commission down as part of closing deals.. LOL

As long as real estate is doing well, Redfin stock will do well.  Back when Redfin started years and years ago they used to offer 2/3 commission rebates then shortly after that they went to 50% commission rebates and then in the past few years then went to a very convoluted black box calculation where the rebate is around 30% if you meet a certain minimum commission for Redfin.  I'm sure that was all done in preparation for the IPO and when they had enough business being generated from their website.  I really like what Redfin did in terms of being a disruptor to the whole real estate commission model but there are some who don't like their assembly line structure.  Overall, I think customers have benefits from Redfin existing.  The real estate companies and professionals that continue to innovate will benefit in the future.

As for me, the reason I work for a smaller brokerage is because the big brokerage chains don't do much other than suck money out of the pocket of the agents.  Those splits only line the pockets of the brokerage owners and, to a larger extend, the pockets of the franchisor.  I know this because in my auditor days at PwC I used to audit Prudential Real Estate Affiliates (franchisor for what used to be known as Prudential Real Estate).  The margins that the Prudential made being the franchisor were beyond insane.  My broker changes me a monthly fee to hang my license and to cover E&O insurance and then a per transaction cost for each side of a transaction which is far lower than an broker commission split offered by one of the big chain brokerages.  So for me, instead of lining the pockets of my broker with commission splits I rather give that money back to the people who provide me the opportunity to make that commission....my clients.  It's a really a win-win in my eyes as the rebate commission rebate is tax-free for my clients (reduces their tax basis in the home) and is tax-free for me since I reduce my gross commissions by the rebates.  It's sort of like prepaid marketing for me but at the end of the day it's the right thing to do and good karma. 
 
I think the market is waiting to see which one of these companies will change the way RE is going to be done.  Most of this old way of business can change dramatically.. it's going to take the right type of company to break the chains.
 
Zillow's an advertising company trying to become a lead generation service. Agents Love the exposure, but hate the way Zillow is trying to connect buyers immediately with Agents other than the listing Agent... unless you pay $$$$$$$ to become a "top agent".

Should Zillow be cut off from the MLS, their value will be crushed. If someone builds a better mousetrap lead generator then Zillow will also get euthanized like Homeseekers.com - once a relative online powerhouse - has.

Time will tell.

My .02c

Soylent Green Is People
 
USCTrojanCPA said:
As long as real estate is doing well, Redfin stock will do well.  Back when Redfin started years and years ago they used to offer 2/3 commission rebates then shortly after that they went to 50% commission rebates and then in the past few years then went to a very convoluted black box calculation where the rebate is around 30% if you meet a certain minimum commission for Redfin.  I'm sure that was all done in preparation for the IPO and when they had enough business being generated from their website.  I really like what Redfin did in terms of being a disruptor to the whole real estate commission model but there are some who don't like their assembly line structure.  Overall, I think customers have benefits from Redfin existing.  The real estate companies and professionals that continue to innovate will benefit in the future.

Apparently, when Redfin first started they were offering a 3/4 commission rebate, but the backlash from other Seattle realtors was so intense they soon dropped it to 2/3.  I guess that still wasn't profitable enough and they dropped it again to 1/2 a few years later.  When I bought in 2010 using Redfin, 50% was the rebate amount.  The house we bought was turnkey aside from one major item.  It needed a new roof, and the Redfin rebate was a enough to cover that.  Thanks Redfin!  I was happy with the service too, but maybe because I didn't need a lot of hand holding.  First time buyers might need more coddling from their agents.

One of the key features for us was being able to quickly view the houses we had already toured, as they were saved to our Redfin profile (36 homes in total).  After touring so many houses, things started to blur together.  We ended up falling out of escrow on our first choice due to an inspection that revealed soil liquification and a crumbling foundation.  That was no good.  Having the profiles of the houses we toured allowed us to go back and review them again and decide which one we wanted to offer on next, if any.  It was about 2-3 weeks after touring it that we offered on the house that we currently own, thanks to this feature.

After we bought, Redfin lowered their commission refunds to 1/3, which I thought was pretty low, and now I'm surprised to see that it's only 1/5.  I mean why call themselves a discount brokerage at this point?  May as well collect the whole commission and invest it in better technology and service.  I'm not sure it would be worth using them again at this reduced amount.

Here's an article talking about their early days:

In its early radical days, Redfin tried to win market share by offering lower prices than competitors. Initially, it rebated to buyers about three-quarters of the customary 3 percent commission a buyer?s agent gets on a home sale.

Buyers would attend open houses and do their own research, then ask Redfin to write up the offer and close the deal.

Rival brokerages and the multiple-listing services that serve themreacted vehemently.

?Competing agents have threatened us with violence, intimidated our customers and tried to block their offers,? Kelman testified before Congress in 2006, the year Redfin launched in Seattle and the Bay Area.

After a year of industry backlash, Redfin backed off its aggressive buyer?s rebate.

http://www.seattletimes.com/busines...tional-brokers-still-a-house-to-house-battle/
 
Liar Loan said:
USCTrojanCPA said:
As long as real estate is doing well, Redfin stock will do well.  Back when Redfin started years and years ago they used to offer 2/3 commission rebates then shortly after that they went to 50% commission rebates and then in the past few years then went to a very convoluted black box calculation where the rebate is around 30% if you meet a certain minimum commission for Redfin.  I'm sure that was all done in preparation for the IPO and when they had enough business being generated from their website.  I really like what Redfin did in terms of being a disruptor to the whole real estate commission model but there are some who don't like their assembly line structure.  Overall, I think customers have benefits from Redfin existing.  The real estate companies and professionals that continue to innovate will benefit in the future.

Apparently, when Redfin first started they were offering a 3/4 commission rebate, but the backlash from other Seattle realtors was so intense they soon dropped it to 2/3.  I guess that still wasn't profitable enough and they dropped it again to 1/2 a few years later.  When I bought in 2010 using Redfin, 50% was the rebate amount.  The house we bought was turnkey aside from one major item.  It needed a new roof, and the Redfin rebate was a enough to cover that.  Thanks Redfin!  I was happy with the service too, but maybe because I didn't need a lot of hand holding.  First time buyers might need more coddling from their agents.

One of the key features for us was being able to quickly view the houses we had already toured, as they were saved to our Redfin profile (36 homes in total).  After touring so many houses, things started to blur together.  We ended up falling out of escrow on our first choice due to an inspection that revealed soil liquification and a crumbling foundation.  That was no good.  Having the profiles of the houses we toured allowed us to go back and review them again and decide which one we wanted to offer on next, if any.  It was about 2-3 weeks after touring it that we offered on the house that we currently own, thanks to this feature.

After we bought, Redfin lowered their commission refunds to 1/3, which I thought was pretty low, and now I'm surprised to see that it's only 1/5.  I mean why call themselves a discount brokerage at this point?  May as well collect the whole commission and invest it in better technology and service.  I'm not sure it would be worth using them again at this reduced amount.

Here's an article talking about their early days:

In its early radical days, Redfin tried to win market share by offering lower prices than competitors. Initially, it rebated to buyers about three-quarters of the customary 3 percent commission a buyer?s agent gets on a home sale.

Buyers would attend open houses and do their own research, then ask Redfin to write up the offer and close the deal.

Rival brokerages and the multiple-listing services that serve themreacted vehemently.

?Competing agents have threatened us with violence, intimidated our customers and tried to block their offers,? Kelman testified before Congress in 2006, the year Redfin launched in Seattle and the Bay Area.

After a year of industry backlash, Redfin backed off its aggressive buyer?s rebate.

http://www.seattletimes.com/busines...tional-brokers-still-a-house-to-house-battle/

.
 
Liar Loan said:
USCTrojanCPA said:
As long as real estate is doing well, Redfin stock will do well.  Back when Redfin started years and years ago they used to offer 2/3 commission rebates then shortly after that they went to 50% commission rebates and then in the past few years then went to a very convoluted black box calculation where the rebate is around 30% if you meet a certain minimum commission for Redfin.  I'm sure that was all done in preparation for the IPO and when they had enough business being generated from their website.  I really like what Redfin did in terms of being a disruptor to the whole real estate commission model but there are some who don't like their assembly line structure.  Overall, I think customers have benefits from Redfin existing.  The real estate companies and professionals that continue to innovate will benefit in the future.

Apparently, when Redfin first started they were offering a 3/4 commission rebate, but the backlash from other Seattle realtors was so intense they soon dropped it to 2/3.  I guess that still wasn't profitable enough and they dropped it again to 1/2 a few years later.  When I bought in 2010 using Redfin, 50% was the rebate amount.  The house we bought was turnkey aside from one major item.  It needed a new roof, and the Redfin rebate was a enough to cover that.  Thanks Redfin!  I was happy with the service too, but maybe because I didn't need a lot of hand holding.  First time buyers might need more coddling from their agents.

One of the key features for us was being able to quickly view the houses we had already toured, as they were saved to our Redfin profile (36 homes in total).  After touring so many houses, things started to blur together.  We ended up falling out of escrow on our first choice due to an inspection that revealed soil liquification and a crumbling foundation.  That was no good.  Having the profiles of the houses we toured allowed us to go back and review them again and decide which one we wanted to offer on next, if any.  It was about 2-3 weeks after touring it that we offered on the house that we currently own, thanks to this feature.

After we bought, Redfin lowered their commission refunds to 1/3, which I thought was pretty low, and now I'm surprised to see that it's only 1/5.  I mean why call themselves a discount brokerage at this point?  May as well collect the whole commission and invest it in better technology and service.  I'm not sure it would be worth using them again at this reduced amount.

Oh wow, I didn't know that they offered 3/4 of the commission as a rebate...probably before I started going onto their website.  But yeah, the rebate will range from 0% to about 30% depending on the total calculated buyer commission...I believe that if Redfin has to get the first $6,000 and then the rebate begins.  They also launched an agent partnership program where 3rd party agents for lower priced homes were routed to Redfin approved 3rd party agents....the buyer would get a 15% rebate (only after Redin got their minimum) and Redin would get a 15% referral fee from the agent.  I know because Redfin sent out mass emails to agents.

Personally, I think the Redfin website is a lot more buyer user friendly and the data on their is much more accurate and almost real time than what you see on Zillow.  I have Zillow calling me monthly asking if I will advertise on their site and I tell them thanks but no thanks as most all of my business is repeat and referral business. 
 
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