By Nicole Friedman

The competition to offer home buyers one-stop shopping, from searching for a home and securing a mortgage to closing the deal, is about to heat up.

Mortgage giant Rocket agreed to buy real-estate brokerage Redfin in a deal that values the target at $1.75 billion, the companies said Monday.

Rocket envisions giving home buyers one place to connect with their real-estate agent, lender, title company and mortgage servicer in an effort to streamline an often time-consuming and burdensome process.

For home buyers and sellers, "there are so many different parties that you have to deal with, and that creates the friction in the process," Varun Krishna, Rocket's chief executive, said in an interview. "If we can create efficiency in that entire transaction, if we can automate more of it, if we can personalize more of it, we can actually create cost savings."

Zillow has a similar goal. In 2022, the real-estate technology company said it was creating a "housing super app," a platform where consumers could navigate the entire moving process.

It has since rolled out a smoother process for buyers to connect with agents, home tours and mortgage financing in more than 40 markets.

"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," said Mike DelPrete, a real estate tech strategist and scholar-in-residence at the University of Colorado Boulder.

Brokerages and mortgage lenders have struggled in recent years due to an anemic housing market. Home sales in 2024 fell to the lowest level since 1995 for the second straight year.

Real-estate companies have long tried to make the transaction process simpler for buyers and sellers, and earn more revenue, by offering referrals and acquiring title and escrow companies.

As part of the Redfin acquisition, Rocket could be planning to offer buyers or sellers a bundled plan, where they could get discounted fees for using more or all of the company's offerings, said John Campbell, an equity analyst at Stephens. "I think consumers win," he said.

The all-stock deal values Redfin at $12.50 a share, more than double where the stock closed Friday. Redfin shares traded up more than 60% as of midday Monday, while Rocket shares were down 15%.

The deal is expected to close later this year, subject to shareholder approval.

Zillow said in February that it would become the exclusive provider of multifamily rental listings for Redfin and its other listings sites. Zillow paid Redfin $100 million as part of the deal, and Redfin disclosed plans to lay off about 450 employees in its rentals business. That partnership will continue, Zillow said.

Rocket's purchase of Redfin "is another signal of a shared push toward an improved consumer experience," Zillow said in a statement. "We believe further investment in connection, tech and transparency is good for consumers, the industry as a whole, and also for Zillow."

Rocket has been trying to expand its business for mortgages used to purchase homes, because the purchase business can be less volatile than the refinancing market. Refinancing accounted for just under half of the total dollar volume of Rocket's loans last year, a high percentage compared to other companies, according to Inside Mortgage Finance, an industry research firm.

Redfin was the seventh-biggest brokerage by volume in 2023, according to RealTrends. Its website is the fourth-most visited U.S. home-shopping site, based on companies' self-reported numbers, DelPrete said.

Write to Nicole Friedman at nicole.friedman@wsj.com

(END) Dow Jones Newswires

March 10, 2025 15:45 ET (19:45 GMT)

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