Questions About New Zillow Mortgage Marketplace
Zillow just took the wraps off of their secretive new mortgage product (see A New Opportunity for Mortgage Professionals). Go check it out - it’s a pretty impressive addition to their site.
In a nutshell: it’s a total reversal of the normal online mortgage quote process. At Zillow, consumers fill out a RFQ for a loan anonymously and the lenders compete for their business. Consumers have the option of choosing to work with the best offer and then can rate the experience afterwards.
As a consumer, I love that Zillow is taking on the established business model head on; that is, taking my info and then selling it on (as a lead) to the highest bidder. That business model should be taken out behind the woodshed, shot and disposed of appropriately, in my opinion.
But keeping my consumer hat on for a sec I’m going to think this through a little bit more.
Huh, Zillow is in mortgages now?
Zillow was absolutely phenomenal with the PR when they launched. Full credit to their PR department and to Community Relations ninja David Gibbons for doing an absolutely bang up job firmly establishing the Zillow brand.
Problem is; I think they may have been too successful. Zillow has now become virtually synonymous with its Zestimates and most people just think of the site as a place to see how much their home is worth. Something some people definitely aren’t too keen on doing anymore (see Using Twitter to Listen to Your Customers)
Bottom line: It’s going to be tough to break through that legacy without some aggressive marketing and/or advertising. The LendingTrees of the world spend a bucketload of money advertising online establishing their brand (see Storms Ahead for Real Estate Sites); Zillow’s stepping into an expensive world, no matter how good their product.
What’s it in for Zillow?
Obviously, hopefully more traffic and according to their media model, more advertising dollars. (They do charge a nominal $25 fee for lenders to join the service, mostly to cover the background screening).
The Zillow guys said this new marketplace product (the “first of many”) is going to move them beyond a traditional CPM model - i.e. serving ads to the anonymous Internet user.
What does that mean? Mortgage apps get them some deliciously juicy demographic data to which they can then serve up highly targeted advertising later on.
Basically, based on the type of loan application you submit, you’ll get a cookie in your browser. Then, when you come back to Zillow you’ll start seeing the appropriate ads based on that collected info. Submit a loan request for $800K and you may get an ad for a Cartier watch, go for $200K and you’ll get ads for Casio.
Bottom line: As a consumer it makes me a little uneasy I’m getting sliced and diced this way, but it’s all in the name of relevance I guess.
Do I really want all this attention?
OK, so I submit a RFQ and the lenders can jump in and respond to me… but I get the sense there’s a lot of hungry lenders out there right now though. And I’m not sure I want to wade through the umpteen dozen responses I may possibly get; part of me is still wedded to the idea that I only want work with the best, most fair, most reputable lenders (is that naive?) - if I have to do too much work trying to figure out who that, is I might bail.
Bottom line: Research is fine, but when it becomes work, it’s not much fun any more. Zillow straddles a fine line here.
That said, I suppose that’s a problem Zillow would like to have.
Even with these questions in mind, I’m going to submit an application to the Mortgage Marketplace. I’m toying with the idea of a move right now and personally, as a prospective home buyer, this product hits all the right notes for me. I’ll let you know how it goes.
In any case, this news will surely be endlessly dissecting across the media landscape and I definitely look forward to reading all the opinions this will no doubt generate, especially from those lenders who choose to participate and those who don’t.
Update - I created a thread in my Real Estate Marketing 2.0 group on Inman.com where lenders and consumers can discuss their experiences with Zillow Mortgage Marketplace. Let’s hear what you have to say.
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12 Comment(s)
6 Trackback(s)
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Todd Carpenter | Apr 2, 2008 | Reply
Regarding advertising. It seems to me that the most obvious candidates would be real estate companies. At least, every time the borrow clicks the “Purchase” box.
Jay Thompson | Apr 2, 2008 | Reply
If I could afford it, I’d love to have an add served up to whoever hit “Purchase” for loan type and “Phoenix” for location…
Andrew | Apr 2, 2008 | Reply
zillow is doing way too much but i like this new product. I think this will be interesting. I have some ideas but lets see if they can read my mind a bit over next few months. But, seriously, now its time for them to focus.
Ann Cummings | Apr 3, 2008 | Reply
Given what’s gone on with mortgages and given the market we’re in where it’s difficult at best to put sales together and even harder to keep them together, I would think agents everywhere would do their darnest to get buyers to use local, known, trusted lenders right there in their own areas rather than some online Z-associated lender who they have no idea about.
And of course, like Jay, I’d love to get my hands on those that type ‘purchase’ and ‘Portsmouth NH’ or any of the other towns in my area……
Kyle Else | Apr 3, 2008 | Reply
Joel - nice article today. I liked the Bottom Line summary.
Jessica G | Apr 3, 2008 | Reply
Hmm, looks a bit similar to a tool created by a little company called HomeGain. Check out Louis’ post this morning calling Zillow out: http://blog.homegain.com/homegain-cries-flattery-zillow
Phil Caulfield | Apr 3, 2008 | Reply
I’ve submitted a few quotes already to borrowers just to see what will happen. Zillow has some work to do. They limit the underwriting fee to $500. For equity lines they don’t accept a negative margin.
I like the concept - I think some kinks need to be worked out. They don’t have a place to report these problems (unless I missed it) except on the discussion threads.
Joe Dahleen | Apr 3, 2008 | Reply
Where can you go as a consumer and get a quote without being hounded by the mortgage providers? I think Zillow is really going to change the game for lead providers. How can they sell those leads for so much now that Zillow is free? Most lead providers are changing anywhere from $9 to $35 for an internet lead that just sold up to 4 times. Yes, that’s as many as calls they get and you never really get it writing unless you give them all of your info. Lending tree leads are more expensive and there lending division is who you are really up against.
Zillow allows the consumer to review and research all they want and pick the one to contact without being contacted first.
As a consumer - you can’t do that anywhere else.
Jon S | Apr 5, 2008 | Reply
I’m a fan of the new Zillow mortgage program. It is a very consumer friendly program. No countless calls, just a fair square deal. Sure, there are some features that are missing for us as lenders(better determining which scenario’s you’ve bid on, or ability to offer different combinations of points/no points), or could use improvement (like limits on fees that seem artificial).
Louis Cammarosano | Apr 6, 2008 | Reply
Joel wrote
“taking my info and then selling it on (as a lead) to the highest bidder. That business model should be taken out behind the woodshed, shot and disposed of appropriately, in my opinion.”
How is that different than taking your information and then pimping it out to advertisers?
Both models result in a direct sale of the consumers information.
In the rush to praise the “transparency” that Zillow is bestowing upon us, I think we are missing as Joe over at Sellsius noted- Zillow has become a Lead Seller, plain and simple.
http://blog.sellsiusrealestate.com/zillowcom/zillow-mortgage-marketplace-is-lead-generator-for-mortgage-lenders/2008/04/03/
Whether Zillow claims its ‘free’ or ‘transparent’ they are still selling leads, just with a different model.
So while you are busy taking lead generation models outback for assassination, keep some bullets ready for Zillow’s new lead generation model.
Rob Lawrence | Apr 6, 2008 | Reply
Zillow has always been an innovator in the marketplace but I do worry about them getting a bit too far over their heads.
Warm Regards,
Rob
http://www.battlecall.com
Gerald Romine | Apr 21, 2008 | Reply
This is capitalism and marketing in it’s finest. Nobody is forcing the customer to fill out anything and those that choose to will be able to receive quotes quickly and easily(albeit with plenty of emails).
For those in the business worried about competing with such a service you focus on “apples vs. oranges”. They are competing for price which is a dangerous competition so you provide service which is always hard to find, in demand, and commands a premium.
The experience you receive servicing your Mercedes is a lot different than that servicing a Nissan and Mercedes owners willingly pay much more for the service.
But I’m a capitalist and will always embrace capitalism.
Gerald Romine
http://www.geraldromine.com