Why I’m Bullish on Redfin

I’ve written about Redfin before, most recently regarding their IPO and the IDX SEO issue. (disclosure: I own a small number of shares).

I spent some time looking at their S-1, looking at their current product, and thinking through their future.

They face a hard road strife with many competitors to fend off (with more to come) — but I’m bullish. Teams are certainly the future of real estate. Zillow knows that (see here), and Redfin knows that. Redfin happens to operate as the largest “team” in the country.

In the S-1, Redfin leads with the following points:

#1 most visited brokerage site

Employee agents for better, more consistent service

Tech makes agents three times more productive, saving consumers thousands in fees

Redfin Mortgage & Title: new potential source of growth; long-term goal of an all digital closing

Seemingly, every product idea I believe can attract consumers away from Zillow/Realtor — such as a markeplace of public CMAs, pocket listings to consumers, & a completely anonymous q&a — could be best executed by Redfin. Why? They have existing consumer reach/audience, funding (especially post IPO), tech savviness, and, most importantly, their business model allows them to force agent activity/behavior under a unified direction & approach (and control quality) in a way that virtually no other brokerage can match. It doesn’t hurt that they play the long game, either.

Their other major strategic consumer advantage is they control the experience end to end; meaning a consistent experience for buyers and sellers. It’s the open vs closed discussion again (which I mentioned in my Alexa/Echo article). There’s no way Zillow or Realtor/Move can compete on that front given their business model of sending buyers to a scattered mix of paying agents. Can Zillow begin to force agent behavior among Premiere Agents, in order to deliver a consistent buyer/seller experience? I’m not convinced.

What do you think about Redfin’s future? Bull or bear?

PS: If someone wants to write a guest post with the bear perspective — shoot me a email (drew at geekestatelabs dot com).

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