Zillow Launches Mortgage Community. The Consumer is Ready, But is The Mortgage Professional?
April 3rd, 2008 Categories: zillow
Zillow formally launched their mortgage community today. David Gibbons was kind enough to give me the grand tour yesterday…my general opinion is that this is a big step in the right direction for a broken mortgage industry.
Stating the obvious…what Zillow has created is a community for mortgage professionals (Mo-Pro), a community that requires said participating professionals be of a certain grain of salt, checking their state licensing information as well as a social security number for a cursory level personal background check. These two stop-gaps insure a baseline quality standard and validate the community as (more) trusted and viable for a consumer as opposed to them walking into the many lender traps that currently exist on the web.
Zillow does not aggregate consumer data to then sell them as leads to the mortgage hounds. Thank God (Yahweh, Jehovah, Muhammad, Buddha, Jesus, et al). Joel has the best remedy for this ad nauseam dinosaur age practice made sickeningly popular by LowerMyBills, LendingTree et al…if he can drag them behind the shed, I’ll pull the trigger. Because of their well funded and non-conflicting business model as an advertising and media company, Zillow can afford to do this and should be properly recognized for staying outside of this black box.
Rating the mortgage professional based on service and rate/price quote accuracy is another positive aspect, a stop-gap to cap bait and switch and other traditional Mo-Pro smarmy marketing strategies.
Anonymity. Love it and consumers will too. However, consumer anonymity can and will cause participating Mo-Pro’s to chase their tail as rate voyeurs flood the system. It will be interesting to see what the client conversion ratio is. How many ‘leads’ will it take a Mo-Pro to respond too before they convert to a dedicated and paying client? Is it 10-1, 20-1, 100-1? While the ‘leads’ may be free, they will be cost heavy using the metric of time.
Consumers are notorious voyeurs. I’m one of them. I submitted my anonymous info to Zillow today and received 3 quotes in less than an hour. The info I provided was extremely attractive and easy to qualify:
692 FICO, $390k loan amount, 76% LTV, Full-Doc, low debt to income ratio, plenty of liquid assets…in other words a straight up automatically underwritten conforming loan scenario.
The responses I got (all 30 Yr Fixed Interest Only products) varied from 5.5% with ~$4900 in lender fees to 5.75% with ~$6200 in lender fees. The lowest quote came from a major bank, the highest quote came from a broker.
The three Mo-Pro’s that responded took one look at my info and undoubtedly shot over quotes without thinking twice within < 3 minutes. Not alot of time invested for nothing in return. No harm no foul.
So my questions are as follows:
How many scenarios as easy (and far more difficult) as mine will a mortgage professional have to spend time on to pull an actual client?
If this quote to client ratio is too high, will top notch professionals continue to troll Zillow’s community in hopes of fishing out a real deal?
If this ratio is too high, and the scenario is more difficult to place, how much real time will a professional spend taking the time to qualify and price the situation correctly?
If the anonymous scenarios are more complicated than my submission, which they assuredly will be, how will consumers respond to the resulting latency in information exchange?
Im going to pause here (for today) and end with stating that Zillow’s mortgage community is a (very) positive step in the right direction, but it needs something else…latent information can be perceived as misinformation.
Mortgage professionals are not equipped to handle what Zillow is throwing at them, not yet.
Also See:
Where is RateSpeed that was supposed to come out long ago?
Great question Bill…First week of May…Check the What is RateSpeed Tab in the header.
It’s been a long strange trip, 2 company’s and 12 months later, it shall be
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Zillow immediately lost their credibility in my eye by offering “free leads” to Mo-Pro’s…
There are so many of us teetering on the edge of career oblivion and we should REALLY think that a free lead is a good one?
On top of that… seriously… if someone is not committed enough to give some REAL information, then how can we Mo-Pro’s be committed enough to spend more than a moment of our time on a free-lead-generating platform.
Transparency is fine and dandy… and really par for the course in most legit and honest practices…
My issue comes with the Bank being that much better than the broker site unseen. Neither could be REAL. A 692 does not mean that you’re not recovering from a BK.. it does not mean that you don’t have 1×30 somewhere.
And on top of it… $4900 vs $6200… $1300 could be title work that the banks do not know how to calculate or state taxes that the broker took into account!
The individuals in the industry are moving closer and closer to a “last man standing” scenario as lenders die, programs die and borrowers dry up. As we see the Zillows of the world launch “free leads” products can’t all us cynics see it for what it is? Desperation??
Rules of thumb for the consumer should not be to focus on fees but to focus on the professional qualifications which have nothing to do with where you work or what your credit looks like (no one gets my SSN online!)… it has to do with integrity and honesty.
Zillow can keep their leads
Zillow’s program is a great program. For them the ability to offer more targeted advertising, and bring more value to consumers in the real estate world than just their trademark “zestimates” which are almost so well known that they limit the brand.
For the consumer, they get real prices and can pick what they want before dealing with the countless phone calls from snake oil salespeople.
For mortgage professionals we can access to consumers looking for a mortgage. Get enough information to make an educated proposal to them. Sure not for everyone, but I am happy to give these consumers a fair deal from my company.
I feel you David…Although I’m not brokering loans anymore, I would give the community a shot, wouldn’t shut the rest of my marketing down, but dedicate say a few hours a week to ‘working the community’.
The $4900 vs $6000 is in lender/broker paid fees only…
Zilows mortgage community is an important first step, it has a ways to go before it reaches a credibility level amongst mortgage pros and consumers, but they can afford to be patient plus they love the traffic all the talk generates.
With a few more steps, say versions 2 and 3, I think they have the opportunity to be a real asset to the mortgage industry if they listen to both sides and thoughtfully implement solid features…
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