Detroit-headquartered Rocket Companies (NYSE: RKT) has announced its acquisition of the Seattle-headquartered brokerage Redfin (NASDAQ: RDFN) for $1.75 billion, or $12.50 per Redfin share.
“Rocket and Redfin have a unified vision of a better way to buy and sell homes,” said Varun Krishna, CEO of Rocket Companies. “Together, we will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs and increases value to American homebuyers.”
“Rocket and Redfin’s approaches to lending and brokerage service have always been two halves of one vision to make the whole home-buying process magical,” said Glenn Kelman, CEO of Redfin. “We want a customer to be able to check her phone to find out what she can afford, see which homes are just right for her, schedule a tour with a local, expert Redfin agent, and get pre-qualified for a loan, all in a matter of minutes. Varun and I see how much better real estate could be when AI guides customers not just through that first step in their search, but all the way home, through the sale, the loan and then a lifetime of accumulating equity and wealth.”
The transaction has been approved by the boards of directors of both Rocket Companies and Redfin and is expected to close in the second or third quarter, subject to approval by Redfin shareholders and the satisfaction of other closing conditions. Kelman will continue to lead the Redfin business, reporting to Krishna.
Redfin was founded in 2004 and operates a home search platform with more than 1 million for-sale and rental listings and a tech-powered brokerage of more than 2,200 agents. Rocket Companies was founded in 1985 and its digital platform provides home financing in all 50 states.
Sounds like the Sears Financial Centers from 1983. Sears owned Coldwell Banker Real Estate, Allstate for homeowner insurance, Dean Witter for investing the profits from selling your house and the Discover card for buying furniture from Sears, the parent company. I worked there at the beginning of my real estate career. Couldn’t fail, except it did. Eventually even Sears, which was the Walmart of its day.
All stock offer, no cash in this buyout. Appropriate for Redfin as this company has NEVER reported positive EPS on an annual basis as a publicly traded company. Good luck Rocket, you’ll need it.
What you are seeing is the takeover of the real estate industry from Main Street to Wall Street, with NAR’s help. Independent brokers keep disappearing, bought up by or driven out of business by Wall Street owned firms (KW just sold) using capital raised through stocks sales to finance the takeover. Within 5 years they will have eliminated most independent brokers and will have taken over the industry. The consumers will ultimately pay the price.
Exactly. In the end buyers/consumers will pay more.
Couldn’t agree more! We bought and sold our first house through Coldwell Banker at a Sears kiosk, got screwed on both sides of the sale, part of why I got into real estate. I love how AI is going to navigate the buyer from beginning to end and only through Redfin approved agents. They are making their money on the loan which has notoriously high fees and then on the agents who have to give them a piece of the pie to be a Redfin agent. Sounds like a scam and conflict of interest to me but hey whose going to stop them? Can’t wait for the AI robot to handle the Quicken oh I mean Rocket or is it Rock Financial, not sure because every time people start to catch on to the fact that they are a meat market and their reputation suffers they change the name, anyway to AI robot to handle a problem with the Rocket people who pass you from this person to that person etc. Hopefully this too will go the way of Sears when people realize they want a human to hold their hand through the process.
I don’t want any redfin agent targeting buyers using my listings !