Redfin completed its acquisition of Bay Equity Home Loans, paying $137.8 million for the mortgage lending operation in its quest to provide customers “a one-stop shop” where they can buy, sell, rent and finance a home, according to a news release from the company.
Seattle-based Redfin previously announced its intention to acquire the lender, but CEO Glenn Kelman said the move is particularly timely as buyers face bidding wars and high home prices, saying, “it’s more important than ever for lenders and brokers to work together on every customer’s offer.”
“In dozens of markets, Bay Equity and Redfin field organizations have already met, and the difference in our agents’ enthusiasm about recommending a Redfin mortgage to their customers is night and day: because Bay Equity has hundreds rather than dozens of loan officers, because Bay Equity supports every type of loan, because Bay Equity was already one of Redfin customers’ top-rated lenders. But the biggest reason we expect to hit the ground running is just how much the two teams have already enjoyed working together,” Kelman was quoted as saying in the news release.
The purchase price “represents a $72.5 million premium over Bay Equity’s tangible book value” as of Feb. 22, according to the news release. The move allows Redfin agents in 91 markets to begin referring customers to one of 400 local Bay Equity loan officers as of Monday.
Bay Equity CEO Brett McGovern also touted the benefits of the acquisition, saying, “Being a part of Redfin will help us meet customers more efficiently, which means we can give Redfin homebuyers competitive rates while delivering a seamless experience from pre-approval to close.”
Bay Equity will continue to operate under its own name and will retain its headquarters in California as well as its current leadership, according to the news release. Loan officers will continue “originating refinance and purchase loans for customers working with Redfin agents as well as customers working with other brokerages.”
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Before the acquisition of Bay Equity was completed, Redfin laid off 121 staffers in its mortgage division.
McGovern said he doesn’t expect “Redfin’s agents to recommend us to customers because we’re part of the same company, but because of the value and service we deliver. Aligning with Redfin recognizes our 14 years of strategic growth nationwide and puts us on a trajectory to become a top 10 lender.”
In February, HousingWire published a deep dive into Redfin’s unique business model, which features iBuying, search portals and, perhaps most interestingly, salaried real estate agents.