Detroit-based company and number 1 mortgage lender in the U.S., Rocket Homes, on Wednesday, August 11, declared its intention to combine all aspects of home selling and buying into one simple customizable platform.
Rocket’s announcement provides a couple of specific ways it wants to cut into the real estate market and challenge traditional agents. However, numerous real estate companies in the U.S. including Zillow and Real Estate Brokerage Compass have nurtured such ambitions.
The system enables a home seller to work with an in-house Rocket real estate agent who is in “downtown Detroit” and will receive a commission of 1.5% of the sales price.
Rocket stated that this remote agent would do many functions of a physically present salesperson, including “advising clients on the best list price facilitating professional photos, list the house on the multiple listings service, negotiate offers and handle all paperwork.
According to the release, the remote agent option will be open to the public starting in the fourth quarter of 2021, with homeowners “paying a significantly lower commission of only 1.5% for the selling agent, as opposed to the traditional fee of 3%, which represents a savings of $4,500 on a $300,000 home.
It further stated that the quest to remain competitive and create a better experience in this purchase environment, brokers need one thing above all: Speed. And there’s one lending partner that has the solutions and resources to give LOs just that.
The average U.S. listing agent fee is closer to 2.5%, according to a RealTrends study. Still, the discount puts Rocket in the company of Redfin and smaller outfits such as Rex and Clever, who are trying to buck the traditional fee split collected by agents.
Rocket is additionally offering a traditional agent service. The company plans to continue their program of recommending agents through the “Rocket Homes Verified Partner Agent Network” program.
Rocket envisions people selling homes through their iBuying platform and then using the company’s website, app, and partner agents to facilitate the purchase of their next house.
Rocket’s further leap into real estate comes after the company reported $1.3 billion in first-quarter net income. That compares favourably to other companies promising a one-stop-shop platform, such as Zillow, which reported $9 million in second-quarter net income, and Redfin, which posted a $28 million loss last quarter.
One challenge to Rocket’s ambitions may come from the federal government. As Inman News flagged, the company spends a couple of pages of its recent annual report noting that the Consumer Finance Protection Bureau may change enforcement of the Real Estate Settlement Procedures Act, or RESPA.
