Redfin has agreed to acquire mortgage lender Bay Equity Home Loans, a move the company says will help boost its efforts to create a comprehensive 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 would accelerate its movement to become a “One stop shop for brokerage, loans and other services. The acquisition is expected to be completed 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 national brokerage scale of 2,400 agents by increasing the number of brokerage clients whose homes the company can finance.
“With Bay Equity’s geographic presence and its full product line, we will be able to immediately offer mortgages to a greater portion of Redfin’s homebuying clients, including jumbo loans and veteran loans. 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 fund hundreds of purchases, and customer ratings are excellent.
The Bay Equity management team will continue to operate under the Bay Equity name following the closing of the transaction. All of Redfin Mortgage’s lending operations will be consolidated under Bay Equity, and some Redfin Mortgage employees will move to Bay Equity, according to company officials.
“It’s a great combination,” said Bay Equity CEO Brett McGovern. “Redfin is a technology leader and this alignment positions us both to thrive in a changing mortgage market. In addition to our established business volume, we will benefit from the clients generated by Redfin’s more than $ 25 billion real estate transactions each year. Additionally, we will have the opportunity to introduce Bay Equity to Redfin’s over 40 million monthly online visitors. It’s about making it easier for our clients to go from mortgage application to closing.
The acquisitions will also result in the elimination of 121 Redfin Mortgage positions, or less than 2% of the company’s total workforce. The positions to be eliminated mainly concern 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 white glove service our employees deserve to make their transition to a new role at Redfin or to a new company as smooth as possible. “