Rocket Companies said today it has completed its acquisition of online real estate brokerage Redfin, uniting the nation’s largest mortgage lender with one of the most visited real estate search platforms.
The deal combines Rocket Mortgage’s lending infrastructure with Redfin’s tech-driven real estate services, and marks a strategic move to create a more integrated homebuying experience. Reflecting that in its release, Rocket referred to itself as a "homebuying platform."
"I’ve used Redfin every day for the last 20 years. I was an early adopter on the platform, in the first 0.4% of traffic, and Redfin helped me find my first home," Rocket Companies CEO Varun Krishna wrote in a post on LinkedIn. "The product brings certainty, ease, and beautiful design to the process of finding a home."
Added Krishna: "Redfin helps you dream it. Rocket helps you own it."
Katie Sweeney, executive vice president for strategy and broker advocacy at Rocket Pro, touched on the acquisition’s impact for mortgage brokers.
“Today is about brokers getting visibility during the home search, not waiting until the financing stage,” she posted on LinkedIn around noon. “It’s about giving borrowers more choice and control. And most importantly, it’s about delivering on our promise to put brokers in the center of the conversation.”
New Program For Homebuyers
To mark the acquisition, the companies also launched Rocket Preferred Pricing, a new program that offers homebuyers incentives when using both Rocket Mortgage and Redfin services.
Borrowers who finance their home through Rocket Mortgage and buy a home listed by a Redfin agent or purchase with the help of a Redfin agent will get a one percentage point reduction in their interest rate for the first year of their loan or receive a lender credit at closing, up to $6,000.
Rocket Preferred Pricing applies to conventional, FHA, and VA loans. Additional offerings for consumers, agents, and brokers are expected in the coming months.
Redfin will now operate under the refreshed brand identity "Redfin Powered by Rocket," reflecting the tighter integration of the two platforms.
"The gulf between the American Dream of homeownership and reality has never been wider," contended Redfin CEO Glenn Kelman. "The reason Rocket and Redfin came together was to bridge that gap, so that the people who spend their days dreaming on Redfin.com can easily use Rocket financing to own their dream."
Shares of Rocket [NYSE: RKT] opened at $14.18 and rose to $14.66 around 10 a.m. Eastern Time.
Structural Simplification
Yesterday was a precursor to today's announcement. In a filing Monday with the U.S. Securities and Exchange Commission (SEC), Rocket said it had completed an organizational and capital structure “simplification” that needed to happen before its acquisitions of Redfin and Mr. Cooper Group can be closed.
“As a result of the completion of the simplification, the Company collapsed its 'Up-C' structure, eliminated its high-vote / low-vote structure and reduced its classes of common stock from four to two,” Rocket stated in the filing.
The move simplified Rocket’s organizational structure and created “a clearer corporate profile,” according to the company, while improving its ability to use its common stock as acquisition currency in acquisition transactions — like the Redfin and Mr. Cooper deals — and enhancing equity liquidity.
The structural and capital simplification was a condition to closing Rocket’s acquisition of Redfin and acquisition of Mr. Cooper Group, the nation’s largest mortgage servicer.
While the Redfin deal is now closed, Rocket noted in the SEC filing that the Mr. Cooper acquisition remains “subject to certain other customary closing conditions."
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