Even though there is no set date yet, the Seattle-based real estate company Redfin has filed to go public, maybe even in 2017. Redfin is primarily known for opening an online platform for browsing homes for sale and then setting up appointments with an agent to tour the property. The public offering for Redfin, or as it will be recognized on Nasdaq: RDFN, is set at $100 million, even though there is no set number of shares to be divvied up.
The Redfin Company and Progress Up to Now
Since its first debut on the real estate scene, many have been waiting and wondering when it would go public. The idea to streamline the house buying process through an online-offline model for real estate access, as well as lowering fees to make homebuying easier and more attractive to potential home investors, has been monumental.
Most real estate agents will charge around 3 percent of the sale of the home while Redfin only asks about half of that. Even with seemingly reduced costs, there has still been the underlying issue of supply and demand. In the past few years, there have simply been fewer houses on the market — Redfin has no control over that.
Other online listings or online-offline competitors might tend to cut down on overhead costs by hiring out contracting agents to give house tours when necessary. Redfin recognizes the importance of quality customer service and has decided to keep their agents on staff. This way there is no shortage during the high season and no disappointing experiences due to a lack of professionalism.
The company continues to grow annually in number of employees as well as annual revenue. Unfortunately, since their debut in the industry, they have yet to make a single profit. Even still, they continue to attract a number of consistent large capital investors.
The Current Developments in Redfin’s Online-Offline Model
Redfin designs and builds its own brokerage software. You can expect similar experience as you might with social media sites or smart advertising where users see what is most relevant to their preferences. Machine learning algorithms make it possible for the system to answer questions and make valuable suggestions.
For those of you that know Zillow, one of its most valuable tools is Zestimate. Zestimate allows its visitors to see the estimated market value for each home listing. Redfin also boasts the ability to calculate the worth of a home for their customers and users allowing it to contend with the well-established competitor.
The goal for Redfin has always been to streamline the buying and selling process for homeowners. That is clearly evident in their newest endeavor to underwrite loans for home buyers to make buying a home as easy as clicking a button. The debts are then later sold to a third-party financial institution.
To take the online buying and selling process one step further, the have recently started buying houses directly from sellers in a program called Redfin Now. Of course, they want to be able to make a profit on the home by posting it on the site and then flipping it as quickly as possible so the seller doesn’t always get the best deal or the most money possible for the home. However, sellers do have a chance to sell their home quickly and easily.
What the Future Holds for Redfin
What does the future hold for Redfin? What could this mean for Seattle Real Estate? We are living in an age of online obsession. As consumers, we want to find the quickest and easiest way to gain access to the world, at best, from our smartphone. The real estate market is just starting to see the progression of online real estate and brokerage firms, each one taking more risks than the previous groundbreaker.
Redfin is promising to become a power player on the real estate stage. They have already moved into a larger facility to accommodate more employees. Many disgruntled customers of previous online-offline brokerage firms are discovering Redfin has, or at least promises, the tools and technology that seems to be missing from other available models. At least for the moment, Redfin seems to be doing everything right. The only question is if they can they stay at the head of the pack or if their competitors find a way to take the lead.
You can find Redfin in more than 80 markets nationwide and they continue to expand. We can expect to hear much more about this company and their future efforts at radicalizing the real estate and brokerage industry.