Seattle's Redfin finds new home under Detroit-based mortgage brokerage

Redfin will soon be under a new roof.

The Seattle-based real estate tech company will be acquired by Rocket, a Detroit mortgage lender that specializes in digital financial services. Rocket agreed to buy Redfin for $1.75 billion worth of equity in an all-stock deal that valued shares at $12.50 each.

“ I've just been a long time admirer of Rocket, and they've been a longtime admirer of us and our site and our service,” said Redfin CEO Glenn Kelman in an interview with KUOW. “We just realized, given everything that's going to happen in real estate over the next few years where AI really could change how quickly we can guide someone to a house, how well we could do that, how efficiently we could do that, if we join forces … we could deliver way better service to our customers. That's why we got together.”

The acquisition is expected to close later this year. When it does, Rocket shareholders will own about 95% of the combined company, while Redfin investors will have approximately 5%, according to a press release.

Kelman said that joining Rocket will fuel the combined company’s launch into artificial intelligence.

“Rocket and Redfin are united in this idea that we should be able to make the whole process more efficient,” he said. “There is so much work that's happening behind the scenes. The real estate agent, the lender, the title person [are] doing all this mundane work that we think could be automated.”

Rocket is already using AI to automate “something like a million hours of labor each year,” according to Kelman.

High interest rates have squeezed the real estate industry in recent years.

Redfin laid off 450 employees in February. Kelman wouldn’t say whether more employees will be laid off as part of the acquisition deal, but he said it’s likely some areas of the business will grow while others shrink.

Kelman also didn't say whether some teams would relocate to Detroit, but said Redfin will always have a strong presence in Seattle. He plans to stay on as CEO of the Redfin business under Rocket.

“ Redfin has had this special relationship with Seattle," Kelman said. " I've gotten involved in this town, and the politics of the town, and just making sure this is a good place for people to live and for businesses to thrive. Rocket is really into that.”