Redfin deal helps Rocket get in front of buyers sooner 

After Rocket announced its move to acquire Redfin earlier this month, industry observers and analysts began speculating about how the deal will shape the real estate landscape. One theme that's risen to the surface: Consumer data is gold, but the human experience remains important.

The $1.75 billion Rocket/Redfin deal, which is expected to close in the coming months, gives the nation's largest mortgage lender access to a massive amount of new consumer data — insights derived from the millions of buyers, sellers and browsers who frequent Redfin's platform each month.

Beyond data, Rocket will be able to tap into Redfin agents' relationships and knowledge of their local markets. That will allow the mortgage giant to incorporate its digital tools into those personal interactions that buyers and sellers value, said Bruce Gehrke, a senior director of lending intelligence for J.D. Power.

"That local piece never really goes away," Gehrke said. "There's so much value in knowing the local story."

Leaning into purchases

While Rocket is one of the biggest mortgage lenders around, Gehrke said the company's dominance has been driven in large part by refinance loans — a subset of the mortgage market that has seen a tough few years as rates remain elevated. 

The acquisition will help Rocket bolster their purchase loans business by funneling Redfin buyers into the loan process earlier in their journey, taking a page from the Zillow playbook. The integration of Zillow Home Loans into the company's "super app" has contributed to big gains in mortgage revenue, Zillow CEO Jeremy Wacksman told Real Estate News in February.

As home prices and borrowing costs have increased, buyers have needed to start thinking about financing sooner, and during that process, they are confronting some key decisions about affordability, Gehrke said. Rocket wants to be involved at that early stage to help buyers get a sense of their options and understand what they can afford.

'Super app concept' could disrupt the lending world

This acquisition alone won't create a single pathway for buyers to complete a transaction, but it could move Rocket closer to that end-to-end experience, Gehrke said.

"If Zillow and Rocket get some success with this kind of super app concept, it will build within itself," Gehrke said. "We've seen technology turn around a lot of other interactions, services and products, disrupting things that people didn't think was possible."

And that could put Rocket in a strong competitive position that its rivals shouldn't ignore. While other lenders aren't likely to change up their business models right away, "they have to keep their eye on this," Gehrke said.

Agents need to get on board with digital tools

Most consumers rely on support from both humans and technology to complete real estate transactions. But research by J.D. Power suggests that many homebuyers, particularly those in the younger generations, are open to shifting the balance toward more digital tools and less human interaction if the technology improves.

"It's not there yet, and there's still an interest and focus on personal interaction, but the better and better the digital interaction gets… we're going to see more and more folks go that way," Gehrke said.

For agents to succeed in that environment, Gehrke said it will be critical for them to embrace tools that free up their time so they can focus on their strengths: Serving as a knowledgeable local resource who can provide insight into the home, neighborhood and city.

"If I'm buying from out of state, I need a local person," Gehrke said. He believes that kind of value can't be replaced by tech, but it can be leveraged by agents. "You've got to look at how you're going to maximize it."