Investors Can Ride This Real Estate Disruptor to Big Returns
Not much has changed over the years in terms of how consumers buy and sell homes in the United States. Real estate technology company Redfin (NASDAQ: RDFN) is in the process of rebuilding this multitrillion-dollar industry around the consumer. With a modest market cap and enormous growth potential, let's explore why Redfin's fresh approach to home buying could make it a home run for investors.
Home ownership is a cornerstone of the "American Dream," yet few people actually enjoy the process of buying one. Consumers rely on real estate agents, banks, and lawyers to get into a new house, and each party takes their pound of flesh along the way. Sellers lose out on 4% to 6% of the home's sale price to commissions, while buyers are paying banks and lawyers thousands of dollars too.
The process is tedious with as many as 12 steps to closing on a house, and a study showed that up to 88% of home buyers are nervous throughout the process. There are more than 1.5 million active agents in the U.S. and over 100,000 active brokerages, according to the National Association of Realtors. The market is fragmented with no clear leaders for consumers to gravitate to.
Source Fool.com
