For many Americans, two of the biggest milestone purchases are a car and a home. While 36% of people purchase a vehicle outright, virtually all families will need financing assistance for their homes. Now, popular brokerage site Redfin is expanding in an attempt to accommodate their clients throughout the home buying process.
The Seattle-based real estate brokerage company currently serves upwards of 80 major metropolitan areas, connecting buyers and sellers with their real estate agents. But Redfin intends to take things a step further by having their real estate agents team up with lenders, creating a virtual one-stop-shop for home buyers who need home mortgages.
This addition, Redfin says, will help the company continue on its mission of putting customers first. Not only will the firm help buyers find a home, but they’ll be able to make the purchase more financially feasible. Essentially, they can keep their customers hooked throughout the entire process.
Redfin also conducts quite a bit of research into the U.S. real estate market, as well as buying and selling habits of consumers. They know better than anyone that approximately 32% of people who are looking to buy a new home are doing so for the first time — and these buyers virtually always need a home mortgage.
Already, some real estate professionals are questioning if lenders who used to benefit from Redfin referrals will take a huge hit.
“This is gonna flip lenders upside down,” real estate professional Jeff Reynolds told GeekWire. “If you look on Redfin’s site, you can see the lenders that they prefer and you can see how much business they’re driving toward those lenders. You’ll see guys who have been reviewed like 600 times. And those reviews are obviously correlated from direct referrals from the folks that are buying properties with Redfin. So in theory, that guy’s business would go away if Redfin started doing the mortgage broker side of things.”
Redfin responded by saying in a news release that they’ll continue to partner with all sorts of lenders and that they’ll encourage clients to choose a lender who offers the best rates and service for their situation. The company went on to say that “there will be no incentives for Redfin real estate agents to recommend a Redfin loan.”
Traditionally, the areas of brokerage and lending have purposefully been kept separate, but Redfin hopes this decision will further streamline the process for many buyers.
Redfin CEO Glenn Kelman stated in a news release:
“Redfin Mortgage will put the customer first through a combination of technology and personal service. This approach to mortgage is the same that has made us successful serving more than 75,000 customers buying and selling homes. We’ll meet customers through digital channels to lower customer acquisition costs. We’ll hire our own mortgage advisers with incentives that reward service, not just sales, so customers get advice they can trust. We’ll track every aspect of the closing in a single system used by mortgage advisers, real estate agents, title experts and the customer so everyone works together on an on-time closing.”
However, the one caveat is that Redfin is not planning on offering mortgage loans or refinancing to customers who purchase their homes using a non-Redfin real estate agent. Ultimately, the success of the new mortgage service will depend on whether home buyers take the bait.
Join Thousands of Property Managers
Get Updates By Email. Receive Weekly Articles and Tips. Advice on Tools and Resources. Updates on Federal and State Laws.