Is Rocket ‘one of the biggest threats’ to commissions? 

The proposed $1.75 billion acquisition of Redfin by mortgage giant Rocket is the latest indication that some real estate companies are gravitating toward a similar growth strategy: providing consumers with a self-contained, end-to-end transaction experience.

Creating a 'one-stop shop': Pairing a huge lending company with a real estate brokerage that offers listings, agents and title services allows Rocket and Redfin more opportunities to keep more buyers, sellers and homeowners within an integrated network. It's something Zillow has been working toward for years with its "super app," and the strategy appears to be paying off. Revenue was way up at the end of 2024, which Zillow attributed in large part to its bundling of services, including mortgages.  

"It's really this idea of a one-stop shop ecosystem in real estate, which has kind of been this holy grail that companies have been searching for for years," real estate tech strategist Mike DelPrete told The Wall Street Journal following the March 10 announcement.

What does it mean for the real estate landscape? While it's too soon to know how the Redfin-Rocket deal will affect the industry more broadly, it suggests that competition is heating up.

"The deal will be more of a blip on the radar for financial press, but it is a very significant development for the real estate industry. I think for the first time in a long time (ever?), there may be a real competitor to Zillow's total dominance of real estate," industry insider Rob Hahn posted on his Notorious Rob Substack account.

It also means more competition for CoStar. The company has invested heavily in Homes.com as it looks to take on the top two home search portal leaders — Zillow and Realtor.com — but it now also faces a bigger, stronger Redfin. Homes.com doesn't offer direct mortgage loans, giving Redfin a new advantage in that area. 

Changing the script on commissions: Beyond putting more pressure on the big portals, the acquisition could disrupt how brokerages do business, NextHome Co-founder and CEO James Dwiggins suggested in a LinkedIn post. 

"Rocket has always been one of the biggest threats to the traditional real estate model," Dwiggins wrote, noting that Rocket could decide to offer steeply discounted commission rates to homebuyers who take out a loan through the company — assuming they can do it in a way that doesn't violate the Real Estate Settlement Procedures Act (RESPA).

"In other words, every single agent better get REALLY good at articulating your value to get paid what you think you're worth in the near future," Dwiggins added.

A threat to small firms? As the industry becomes more consolidated, with more market share in the hands of large companies, boutique lenders and brokerages are already facing greater challenges. This latest acquisition will likely spark concern among those smaller real estate firms, particularly given all the technological advantages — including artificial intelligence — that come with this deal. While it will up the pressure, it could also mean opportunity, according to mortgage loan expert Sherry Riano. 

"Instead of seeing this as a threat, I challenge my fellow mortgage professionals and realtors to view this as a wake-up call — a push to refine our strategies, double down on relationships, and showcase what makes us different," Riano wrote on LinkedIn.