A new twist on the real estate game with old ideas. From Crains Chicago Business --> http://chicagorealestatedaily.com/cgi-bin/news.pl?id=26512
The concept behind listing homes at a lower fee to attract buyers is nothing new -- just the way money is being raised to start these new companies up. What I find most interesting is that these supposedly new ideas are being started up by people new to the real estate business. Instead of hard work and building a system up that actually makes money, let's just raise the money through an IPO or Venture Capital using other people's money (OPM) on something that loses money. From Crains Chicago:
"Iggys which was launched in April 2005, had lost a total of $7.6 million since March 31, according to a registration statement filed with the Securities and Exchange Commission last month. The firm faces a crowded field of online competitors, including ZipRealty Inc., iNest Realty Inc. and Redfin Corp."
It's the Dot com game all over again except it is being applied to ideas that are nothing new in the real estate business.
"Iggys plans to raise $17.25 million in the IPO, using the proceeds for general corporate purposes, including marketing and technology, according to the registration statement. Minneapolis-based Northland Securities Inc. is the sole underwriter for the offering."
Wow, we've got it all wrong. Any real estate Broker with a website should just form a corporation raise a couple million in an IPO and list homes for free on their website. It's certainly a lot easier then actually selling real estate.
"This is an industry that desperately needs to be transformed," Mr. Fox says in a recent news release. "Fixing the broken real estate and mortgage industries requires revolution, not evolution."
There really is nothing revolutionary about this concept and the only thing new about this business model is how money is being raised to fund it.
Personally, I see nothing innovative about using the MLS for something that it was not created to be used for. I'm not going to elaborate on this topic but it basically involves making money off of other people's work.
Really now, what would stop anybody with a real estate license from applying these concepts? I'll try out the same concept for $5,000,000 of somebody else's money and we actually have experience selling real estate!
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