2 days ago
Rocket Companies completes purchase of Redfin
Rocket Companies announced Tuesday that it has closed on its previously announced $1.75 billion deal for real estate brokerage Redfin, a deal that combines Redfin's home search platform with Detroit-based Rocket's mortgage lending.
"I've used Redfin every day for the last 20 years. It helped me find and fall in love with my first home, completely changing how I thought about real estate," Varun Krishna, CEO of Rocket Companies said in a statement Tuesday. "The Redfin team is best-in-class at building simple, intuitive experiences - perfectly aligned with Rocket's vision for the future of homeownership."
Founded in 2004, Seattle-based Redfin features more than 1 million for-sale and rental listings, draws nearly 50 million monthly visitors and operates a brokerage with more than 2,200 real estate agents nationwide. Redfin's web site Tuesday showed a revamped brand identity with the tagline "Redfin Powered by Rocket."
"The gulf between the American Dream of homeownership and the reality has never been wider," Glenn Kelman, CEO of Redfin said in a statement. "The reason Rocket and Redfin came together was to bridge that gap - so the people who spend their days dreaming on can more easily use Rocket to turn those dreams into reality."
Earlier this year, Rocket announced that it would acquire Redfin in an all-stock deal - one of two acquisitions expected for Rocket this year. The second is mortgage servicer Mr. Cooper Group Inc., which is expected to be an all-stock deal worth $9.4 billion.
The acquisition has long-term potential, though the timing may present some short-term challenges, said Tim Nash, vice president emeritus and director of the McNair Center at Northwood University.
"Currently, home sales are in a slump - the worst period in at least seven years for new and used home sales," he said. "Interest rates are high, and the economy seems to be slowing."
Nash said Rocket is making a strategic play by acquiring Redfin's online tools and brand, as opposed to paying the expense to expand internally. The result could be a better experience for Rocket and Redfin consumers.
"They are going to benefit from a lot of the greater online capacity, greater web presence that they'll incorporate from Redfin into Rocket," he said. "So the average customer should get more information and be better, more quickly served with a lot more information."
To mark the occasion, the companies introduced Rocket Preferred Pricing. Clients who finance their home through Rocket Mortgage and purchase a home listed by a Redfin agent or with the help of a Redfin agent will have a 1% interest rate reduction for the first year or receive a lender credit at closing, up to $6,000.
Rocket and Redfin officials said they plan to launch additional products for homebuyers, real estate agents and mortgage brokers in the coming months.
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