Home mortgage lender Rocket Cos. plans to acquire online brokerage firm Redfin to bolster its business and provide homebuyers with more services.
The deal aims to integrate lending and buying tools into one interface that can streamline the experience and drive down costs for consumers, Rocket said Monday in a statement.
The proposed all-stock transaction for $1.75 billion, or $12.50 per share, represents a 63% premium over Redfin's average stock price for the past 30 days ended Friday, according to Detroit-based Rocket.
Redfin’s stock peaked during the pandemic at about $97 and has been on a downward trajectory since. It hit an all-time low of $5.82 on Friday before the Rocket deal was announced. Redfin said its net loss in the quarter was $36 million compared to a net loss of $23 million a year earlier.
The two companies’ primary functions would come under Rocket, allowing prospective buyers to search listings, contact agents, find loans and get help with title transfers and closings in one place, Rocket executives said Monday on a conference call.
Rocket CEO Varun Krishna said the traditional process requires buyers to work with separate entities, and this move combines vital ones, potentially saving buyers 50% on fees, based on the cost of a $430,000 home in the United States.
“Home search, brokerage, mortgage, title, closing, servicing all exist in separate ecosystems, forcing consumers to piece together a complex and frustrating journey,” Krishna said on the call. “This disjointed system creates confusion, adds friction, and drives up transaction fees totaling roughly 10% of a home’s cost.”
Back in May, Redfin agreed to pay $9.25 million to settle lawsuits filed in federal court in Missouri that claimed U.S. homeowners faced artificially inflated broker commissions in violation of antitrust law. Judge Stephen R. Bough of the US District Court for the Western District of Missouri approved the settlement in October.
Under the Rocket Mortgage deal, Redfin will retain its brand and website. The Seattle-based company has 2,200 real estate agents; reaches about 50 million monthly visitors, mainly on mobile; and facilitated 61,000 home transactions in 2024, according to Krishna. Rocket connects with 2 million purchase contacts annually, he said.
Rocket began showing home listings on its website in January alongside a rebrand that combined Rocket Mortgage and Rocket Home. On its fourth-quarter earnings call, Krishna said the move increased mortgage applications sevenfold compared to the previous Rocket Homes site.
Under the deal, Redfin CEO Glenn Kelman will continue to lead the Redfin business, reporting to Krishna.
Homes.com reached out to Rocket and Redfin for additional comment but did not immediately hear back.
Mortgage lenders and real estate firms have combined in the recent past. Redfin itself acquired lender Bay Equity Home Loans in 2022, and Zillow bought Mortgage Lenders of America in 2018 to begin a financing service. CoStar Group offers home listings, news and residential real estate data through Homes.com.
The Rocket-Redfin deal is expected to close in the second or third quarter, subject to approval by Redfin shareholders and other closing conditions.