Rocket Homes is one of the latest all-inclusive websites for home buyers and sellers. With an exhaustive, searchable database of listings, and an integrated tool to connect users with local agents and mortgage lenders, Rocket Homes appears to be a true “one stop shop” for real estate.
However, while Rocket Homes can connect buyers and sellers with professionals who can help with real estate transactions, there's little other benefit for users.
For example, if you find a listing agent through Rocket Homes, you will pay the full standard 6% commission. There's no cost-saving perks.
On the other hand, Clever Real Estate connects you to top-rated, local agents, in much the same way Rocket Homes does, but also offers a significantly discounted commission rate that can save you up to 50% on commission.
Read on to learn how Rocket Homes works, where they excel and where they fall short, and alternatives that can save you money.
What is Rocket Homes?
Rocket Homes is a comprehensive website where home buyers and sellers can search a huge database of property listings, connect with an agent, and get pre-approved for a mortgage, all in one place.
Rocket Homes was previously In-House Realty, a Detroit-based fintech real estate company, that was acquired by the mortgage giant Quicken Loans, and rebranded as Rocket Homes.
On the surface, Rocket Homes looks to be an all-inclusive site for home buying and selling. But if you look under the hood, it turns out that it's really more of an agent referral service that, through its affiliation with Quicken Loans, also offers an integrated financing tool.
What does that mean for consumers?
Technically speaking, Rocket Homes doesn't do anything for users other than connect them to real estate agents and mortgage lenders. The agent handles the property search and transaction, and Rocket Mortgage (or another lender) handles the financing.
Rocket Homes simplifies and enables the process for users, but convenient is its main benefit; users still pay full real estate commissions.
It should be noted that Rocket Homes does not require users to get financing through Rocket Mortgage; Rocket Homes users can use any lender they like, and still buy through Rocket Homes.
Finding an Agent with Rocket Homes
Finding an agent with Rocket Homes is fairly straightforward. Users sign up on the Rocket Homes website, or by calling a toll-free number.
If you're a buyer, Rocket Homes will help you assess your financial situation and apply for financing, so that when you connect with your agent, you come with a mortgage pre-approval.
Depending on your needs and location, Rocket Homes will connect you with one of their local Partner Agents within one business day. If the relationship doesn't work out for any reason, Rocket Homes will connect you with a different agent, free of charge.
Agents who want to become a Rocket Homes Partner Agent must meet some fairly strict guidelines. They must work for an eligible real estate brokerage, and they must have been a full time real estate agent for at least two years. There's a transaction minimum, too; agents must have closed eight transactions in the previous 12 months. Once an agent becomes a Rocket Homes Partner Agent, they must maintain a rating of 4.5 stars out of a possible 5 stars.
Does Rocket Homes charge a fee?
Rocket Homes doesn't charge the buyer or seller a fee for their services. Rocket Homes generates revenue by directing you, a client referral, to one of their Partner Agents, and then taking a percentage of the commission when the sale closes.
Keep in mind, though, if you sell a home with a Rocket Homes Partner Agent, you'll have to pay a standard commission of 6%, unless you negotiate a lower rate.
Rocket Homes offers convenience, but there's no discount or financial incentive to selling through them.
How do Rocket Homes listings work?
If you're a seller, you'll contact Rocket Homes, which will put you in touch with a local agent. That agent will list your home on your local MLS, and your property will automatically be syndicated onto the Rocket Homes website.
If you're a buyer, the first thing you'll do upon contacting Rocket Homes is to go through the mortgage pre-approval process. That means an open assessment of your finances and assets, leading to a pre-approval letter for a home loan of a specific size.
Then you'll be referred to a Rocket Homes Partner Agent, who'll help you find the home that's right for you. Once you settle on a property, your pre-approval should help you get serious consideration from the seller, and speed up the entire transaction.
Once the transaction is finished, the two agents will split the commission, with Rocket Homes taking a percentage of that money in exchange for the referral.
What benefits does Rocket Homes offer?
The main advantage of working with Rocket Homes is convenience. Their website allows users to connect with agents, acquire financing, and browse properties all in one place. This has tremendous appeal to users who are intimidated by the long, complex home buying process.
What are the drawbacks of using Rocket Homes?
First and foremost, Rocket Homes doesn't offer any financial incentive to users. If you sell your home with Rocket Homes, you'll pay the same standard commission, than you would if you sold it through an unaffiliated agent.
Also, Rocket Homes is owned by Quicken Loans, and users are encouraged to use Rocket Mortgage. Buyers need to do their own due diligence to ensure they're getting the best deal on their mortgage. Even a half-point of interest can equal tens of thousands of dollars over the term of a mortgage.
Top Alternatives to Rocket Homes
For buyers and sellers who are only looking to be connected to a local agent, or for a little guidance when it comes to acquiring financing, Rocket Homes is a great choice. But for buyers and sellers who are looking for cost savings in their transaction, Rocket Homes doesn't have anything to offer them.
That means sellers who go through Rocket Homes can expect to pay the full commission of 6%.
At Clever, we refer you to top-rate agents from respected brands and brokerages, but we also offer a significant cost savings. Our Partner Agents offer a full-service experience at a flat rate of $3,000 or, if your home sells for over $350,000, a 1% listing commission.
Let's look at some numbers to see how much this can save the average home seller. According to Zillow data from September 2019, the median home value in the U.S. is $229,000. Assuming a 6% commission, the seller would be on the hook for a commission of $13,740 if they used a Rocket Homes.
If that seller went through Clever, they'd pay only $9,870 in total commissions (3% to the buyer's agent and $3,000 to the listing agent).
For buyers, Clever offers a Home Buyer Rebate in 40 states of $1,000 on homes over $150,000, and if you buy a home for over $500,000, you get up to 1% of the sales price rebated. That's real money that goes right back into your pocket.
Intrigued? Contact us today for a free, no-obligation consultation, and get started on your home-buying journey today!
Top FAQs About Rocket Homes
Is Rocket Homes owned by Quicken?
Rocket Homes was formerly In-House Realty, but was acquired by Quicken, and rebranded as Rocket Homes in late 2018. Rocket Homes is essentially an agent referral network, but because of its affiliation with Quicken, users also get help with the mortgage pre-approval process.
Can FSBO sellers list on Rocket Homes?
Rocket Homes is mainly an agent referral business, meaning that the way they make most of their money is by connecting sellers with agents. A free FSBO listing wouldn't benefit Rocket Homes or its Partner Agents.
Furthermore, a listing has to be posted on MLS to be syndicated onto Rocket Homes, and an FSBO seller wouldn't be able to get their property onto the MLS.
How can real estate agents partner with Rocket Homes?
To become a partner agent with Rocket Homes, an agent has to meet certain criteria. They must work for an eligible real estate brokerage, and they must have at least two years of experience working as a full-time real estate agent. In addition, the agent must have closed eight transactions in the previous year.
Once an agent is accepted into the Rocket Homes partner network, they must maintain a 4.5 out of 5 star rating, and they must meet the Rocket Homes general conduct standard.