Redfin has entered into an agreement to acquire Bay Equity Home Loans, a national mortgage lender. Under the terms of the merger agreement, the purchase price is estimated to be $135 million in cash and stock. 

According to Redfin, Bay Equity is nearly ten times the size of Redfin’s existing lending business, so it can help the nationwide brokerage to increase the number of its customers Redfin can finance. 

Several publications have reported that Redfin will lay off a portion (estimated at 2% or less) of its mortgage workforce. 

Redfin said the acquisition is part of its strategy to become a one-stop shop for brokerage, lending and other services. Redfin expects the acquisition to close in the second quarter of 2022, pending customary approvals, and to be accretive to 2022 earnings per share.

“For years, Redfin has talked about becoming a one-stop shop for brokerage, mortgage, iBuying and title services,” said Redfin CEO Glenn Kelman. “Just having one company offer all these services is more efficient, letting us keep customers’ lending fees low. But our long-term vision is to combine lending and brokerage services into new ways for people to move from one home to another. Buying Bay Equity not only gives us the scale to execute better on the first stage of this vision; it also gives us the latitude to start earlier on the second stage, which will let Redfin customers buy homes they couldn’t have gotten through a stand-alone broker or lender.”

After the deal closes, the Bay Equity management team will continue to operate under the Bay Equity name, originating mortgages for customers working with Redfin agents, customers working with other brokerages, and customers seeking to refinance.

“This is a formidable combination,” said Bay Equity CEO Brett McGovern. “Redfin is a technology leader and the alignment positions us both to thrive in a changing mortgage market. In addition to our established book of business, we will benefit from the customers generated by Redfin’s more than $25 billion in real estate transactions each year. Plus, we will have the opportunity to present Bay Equity to Redfin’s more than 40-million monthly online visitors. It’s all about making it easier for our customers to go from mortgage loan application to closing.”

Founded in 2007 in the San Francisco Bay Area, Bay Equity is a licensed mortgage lender in 42 states and employs approximately 1,200 people. 

NEXT Mortgage News logo

Stay in the know

Get the daily intel that impacts your customers, employees and market. 

Up NEXT eNewsletter — Industry news

Thank you!

Share This