zillow | JeffXJeffX

Zillow Launches Mortgage Community. The Consumer is Ready, But is The Mortgage Professional?

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:

More (and More) Speculation About Zillows Mortgage Offering

From the Zillow Blog regarding their pending foray into the mortgage industry:

To participate in this new product offering, lenders must have their professional status confirmed prior to connecting with borrowers, so we want to give lenders a head start on the process:

1. Register with Zillow, if you haven’t already.
2. Then apply as a lender, and answer a few questions about yourself.
3. While access to borrowers is free, a one-time application fee of $25 is necessary to cover the costs of having an independent third party confirm your professional and employment status to Zillow. This is the only charge to participate; there are no other fees.

Hat tip to Blown Mortgage for the screen shot…

Gut reaction:

Zillow is taking measured steps to insure mortgage professionals who wish to participate in their pending ‘mortgage lead network’ are actually licensed and of generally sound character (on paper), to which I say: Good call!

I’ve speed read about 5 articles regarding Zillows pending mortgage offering from the likes of Brian Brady, Morgan Brown, Greg Swann, Todd Carpenter and on the Zillow blog itself. Since I’ve link loved to enough speculation to keep even the most rabid tabloid hungry reader satisfied, I’ll spare everyone my crystal ball predictions and just wait for Zillow to roll out their offering.

I’m a long time fan of the big Z and get good vibes from everyone I’ve met within their organization, so I’m optimistic based on this early tid-bit of news…not quite as much as Swann however, who is gushing with accolades about Zillow for ‘Reinventing and perfecting Capitalism’..? Maybe BHB knows information I dont (maybe I should sponsor BHBU too).

What I do know is that Zillow is becoming a Name Brand to more and more of the consumer public, and their mortgage play will surely add to this…which is exactly what I believe they are looking for. Zillow is trying to become to real estate (and mortgage) what Vasoline is to petroleum jelly.

Yahoo!, Zillow and Trulia Talk About Merging Ideas to Create a New Data Standards Format

Yahoo!, Zillow and Trulia Talk About Merging Ideas to Create a New Data Standards Format.

Hooray! The single largest issue that bogs down better real estate Search is the hieroglyphical nature of the data between repositories (MLS’ primarily).

Many times cooperative yields far better results than competitive…but then the id, ego, and/or super-ego goes and gets in the way of things. Galen openly loathes MLS data normalization, so this appears to be a good thing. Looks like these current pillars of real estate Search have put aside their respective psyche’s in attempt to make real estate Search better for everyone.

A National MLS Won’t Work, But a Loose Network of Savvy Real Estate Professionals Could

Trulia, Zillow, Propsmart, Roost, DotHomes, Terrabitz (the list of contenders goes on and on) are some of the players in a race to become the new ‘National MLS Solution’. Initially a proponent of ‘anything except the current system’, I’ve sat back and watched hundreds of millions of dollars be sunk into the promise of a single website with all the listings in an easy to navigate user interface, only to be terribly disappointed.

I just don’t see any of them as an answer to the most important question revolving around online property search for every consumer:

Who’s got all of the listings?
I’ve talked with many real estate professionals about ‘working with’ Trulia, Zillow et.al, using their tools, what they like and what they don’t. Opinion varies from ‘just a novelty’ to ‘part of my marketing strategy’ to ‘F-em’ . The most compelling and consistent comment I get is that none of these sites contain anywhere near 100% listing penetration for a given MLS’ designated area of coverage.

During Inman NYC 2008 Teresa Boardman and I were chatting about various topics within the re.net world, one being Trulia’s recent releases. Teresa mentioned that after doing some research she found that listing penetration on sites like Trulia et. al. typically maxed out at ~20% of total available inventory.

‘I don’t understand or agree with the need for a national real estate web site at all. Most home buyers just look in one geographic location and do not need to see listings in all states.’

Teresa goes on to state:

‘Last time I checked both Trulia and Zillow had only a small percentage of the homes that are listed in the MLS listed. I guess since there are so many web sites with IDX solutions making all the listings widely available I don’t get the point of these national type sites that just have a few of the listings in a given area. I will go as far as to say that the sites are doing the consumer a disservice.’

So if I’m a consumer and I want to see EVERY PROPERTY thats currently on the market, none of these sites come close to fulfilling my needs, as a matter of fact I’ll probably have to go to all of them and still wonder if I’m missing out on that house. If this is indeed the case, which it is, I’m better off visiting a local rePros IDX fueled site. They may not be quite as sexy, actually downright ugly, but at least I know I can find far more listings than any of the (Third Party Destination Sites) TPD’s out there today. I also don’t want to be pitched from every sidebar and header of every page…the noise is deafening.

If I’m a rePro, I don’t want potential clients leaving my site, period. TPD’s (must) pull consumers back to their site to access a majority of features to quench their advertising based biz model…i.e. they offer some cursory level watered down application thats true purpose is to pull the consumer back the the TPD’s main site, akin to an arsenic laced olive branch offered to the rePro. ‘Here, take this cool little application stick it on your site and we both win!’ Ehhh, wrong. Although the intention may be positive, the result often is not in favor of the rePro.

The problem with the cornucopia of TPD property listing sites ultimately lies in the ways they attempt to achieve true ‘long tail’ property search: Their business model and/or their aggregation method. RePros don’t (won’t) like to give a TPD their lisitngs, only to be charged to feature them (this is the current MLS’ problem)…thus this model should be cast into eternal purgatory, floating rather meaninglessly between failure and marginal profitability, probably hoping they get acquired by MicroHoo...Secondly, rePros don’t like their listings scraped (for obvious reasons)…if a biz model relies on raw scraping, it’ll be scraping up loose change off the street to survive.

So where is the middle ground of killer technology and rePro listing penetration? I think BlueRoof is headed down the right path. Technology (Solvent) + rePro (Solute) = A Solution…one that both consumers and professionals can benefit from.

If like minded rePros (socially) networked together using some of todays (and tomorrows) killer apps, the TPD listing sites (1.0) value propositions could evaporate overnight…The open API that killed the Third Party Destination site…Et tu Brute?
Also See:

FoREM

Transparent Real Estate

St Paul Real Estate

The Real Estate Weenie