Redfin has agreed to acquire mortgage lender Bay Equity Home Loans, a move the company says will help it continue its efforts to create a complete real estate solution.
The San Francisco Bay Area mortgage lender is licensed in 42 states, including Massachusetts.
The purchase price is estimated at $135 million in cash and stock, according to a company announcement. Redfin said the acquisition will accelerate its decision to become a “one-stop shop for brokerage, loans and other services. The acquisition is expected to be finalized in the second quarter.
Bay Equity is nearly 10 times the size of Redfin’s existing lending business, according to the announcement. The acquisition will help match Redfin’s nationwide brokerage scale of 2,400 agents by increasing the number of brokerage clients whose homes can be financed by the company.
“With Bay Equity’s geographic presence and comprehensive product suite, we will be able to immediately offer mortgages to a larger share of Redfin’s homebuyer customers, including jumbo loans and loans for veterans and people with lower credit scores,” said Adam Wiener. , president of real estate operations at Redfin. “Perhaps most important of all, Bay Equity shares Redfin’s commitment to customer service. Our clients and agents have worked with Bay Equity to finance hundreds of purchases, and client reviews are excellent.
Bay Equity’s management team will continue to operate as Bay Equity after the deal closes. All of Redfin’s mortgage operations will be consolidated under Bay Equity, and some Redfin Mortgage employees will transfer to Bay Equity, according to company officials.
“It’s a terrific combination,” said Bay Equity CEO Brett McGovern. “Redfin is a technology leader, and the alignment positions us both to thrive in an evolving mortgage market. In addition to our established business volume, we will benefit from the customers generated by the more than $25 billion in transactions properties from Redfin each year. In addition, we will have the opportunity to introduce Bay Equity to Redfin’s over 40 million monthly online visitors. This is to facilitate the journey from mortgage application to closing for our clients.
The acquisitions will also mean the loss of 121 positions at Redfin Mortgage, less than 2% of the company’s total workforce. The positions to be cut relate mainly to sales support, capital markets and operations.
“Many of these people are the pioneers who helped create Redfin Mortgage from the ground up, and we owe them a debt of gratitude,” Wiener said. “Our transition team will provide the premium service our employees deserve to make their transition to a new role at Redfin or a new company as seamless as possible.”
