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Iggy’s House and B.S. Realty
Posted by Marlow Harris under Real Estate
[6] Comments
In an effort to entice customers to become investors, Iggys House and BuySide Realty sent out an unsolicited email blast to 30,000 individuals this week, who had registered on their sites to either look at homes or sign up for their free listing service.
Dear Future Investor,
As you may know, Iggys House, Inc. is in the process of going public. Iggys House is the parent company of BuySide Realty. Some of our customers have expressed an interest in investing in our initial public offering.
We started our “road show” for the offering, and expect to continue it over the next few weeks. We have created an online version of the road show presentation. Here is the link:
The following is a summary of our proposed public offering. You should carefully read and consider the information contained in our preliminary prospectus for the offering before making an investment decision.
Click here to view our prospectus.
We have filed a registration statement with the Securities and Exchange Commission in connection with an initial public offering of 1,400,000 units, with each unit consisting of one share of our common stock, and one Class A warrant and one Class B warrant.
The initial public offering price of the units is $6.00 per unit.
Each Class A warrant entitles its holder to purchase one share of our common stock at an exercise price of $7.50 (125% of the initial public offering price) and is exercisable for 12 months following the closing of the offering. Each Class B warrant entitles its holder to purchase one share of our common stock at an exercise price of $9.00 (150% of the initial public offering price) and is exercisable for 36 months following the closing of the offering.We have applied to have our units, shares of common stock and Class A and Class B warrants listed on the NASDAQ Capital Market under the ticker symbols “IGGYU,” “IGGY,” “IGGYA,” and “IGGYB,” respectively.
Our initial public offering will be undertaken pursuant to a firm commitment underwriting. The managing underwriters are Northland Securities, Inc. and Bathgate Capital Partners LLC.
How to Invest
If you wish to learn more about how to invest in our initial public offering, please contact us at IPO@IggysHouse.com, and we will direct you to one of our designated underwriter representatives.Best regards,
Joseph J. Fox
Chief Executive Officer
Iggys House, Inc.
The Retail Road Show is about a 20 minute advertisement for their business, with all the bad, scary stuff left out. Some not-to-miss items on the prospectus: Page 7 financials elaborate the real estate sales income of 570K v.s. company losses of $5 million dollars, and you’ll enjoy page 62 where CEO Joseph Fox explains why he paid himself and his brother a $100K bonus in January, 2007.
The company said it intends to use the proceeds of the IPO for general corporate purposes and to repay its $1 million bridge note and any outstanding debt. I suppose this will also get Avi Fox off the hook for that $1.2M line of credit he guaranteed with Cole Taylor Bank.
Though they apparently have a lock-up agreement of 360 days, I imagine the founding team already has an exit strategy in place to liquidate their portion of the stake in the firm as soon as legally possible to get back some of their dough they’ve sunk into this losing proposition.
Start-up Web brokerage plans IPO in tough housing market, Chicago Real Estate Daily
6 Responses to “ Iggy’s House and B.S. Realty ”
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You must be a realtor. You hate the idea of the average Joe having an option to the services you and the other traditional realtor provide.
I have read many blogs from “realtors” slamming new models. If you guys spent as much time servicing your clients as you do your blogs maybe you wouldn’t be going extinct…..
I don’t hate the idea of the average Joe having an option to the services a traditional Realtor provides.
But I do dislike carpetbaggers and other outsiders attempting to gain an economic advantage in a field where they previously had no interest or connection, and attempting to make changes in an area where they have no direct experience or understanding.
I also dislike those who use lies and manipulate the truth for their own economic benefit.
When Joe Fox says that Buyers who find their own homes themselves should not have to pay a Buyer Agent fee, I agree.
However, when he says that over 60% of Buyers find their home themselves, that is a manipulation. Over 60% of Buyers could have indeed saw their homes first on the internet, but if they saw that home on my website through my IDX feed or on any other website owned by any of my competitors or even on BuySide’s own website using an IDX feed, they have used the tools that we, the real estate industry have developed and provided, to find homes.
The real estate industry has worked hard to provide the tools for buyers and sellers to easily find homes for sale online and also to provide home valuations and other important information.
If a Buyer uses these tools that we, collectively, have created and provided, and then comes back to us for a rebate because they found the home online “themselves”, that is dishonest and unjust.
Companies like Iggy’s House and BuySide Realty are getting licenses and joining MLS’s all around the country, using the system they so hate and the hammer of the DOJ to insure their inclusion, and then are turning the industries own business practices against the real estate brokers themselves.
As they note on Page 13 in their prospectus, participation in the MLS is voluntary. Any group of brokers could decline to participate at any time and perhaps start their own MLS with a different set of rules. It’s not a public utility nor a public service. It’s for the real estate industries benefit, to assist their members so they can do their job efficiently. If companies such as Iggy’s House and BuySide continue to abuse and misuse the system, as the prospectus notes, any group of brokers could just stop playing, take their marbles, and go home.
Yes, some buyers “find the house themselves”. Many do. Unfortunately, that is such a small piece of a transaction that a rebate is an overreaction on one side of the coin, and gross negligence on the other.
A rebate coming from the seller’s equity pretty much tells you what they are willing to negotiate further. Nothing. Hope you like the price and hope you do not have large defects found at inspection. Unfortunately, even if the seller is amenable further negotiations on money, a buyer underrepresented will have slim opportunity to take advantage of that fact.
What buyers truly need for the money they spend on a house is representation that provides a genuine value. It can save them money on the sale: Valuable. It can save them from unintended consequences later: Priceless.
See my related post on Seattle Real Estate Advocate — http://seattlerealestateadvocate.blogspot.com/
I found Marlow Harris’ post to be very informative and useful, and she is right – but I have to make one comment. The trend for real estate is to increase in value over time. Prices go up – and so does the dollar amount of the commission that these real estate agents receive. Commission based on selling price of the property is broken in my opinion. The amount of money these agents receives goes up with the price of real estate, however the value that a real estate agent brings to the transaction remains largely unchanged. Agents do provide a realistic value and a useful service to buyers and sellers of properties, and they deserve to be paid for their services. But I don’t think it’s right for them to get increasingly richer and richer off of the backs of people selling homes, when they provide the same level of service over time. Sell a million dollar home – at the average commission of 6 to 7% – split the commission, pay the brokers (for not doing that much in the transaction) – let’s say the realtor nets 11,000 – 12,000 fromthe transaction. That’s a lot of money for very little time put into the transaction. Just my opinion which I have the right to voice.