Update – Zillow Mortgage Marketplace has launched. My full review is linked.
Earlier this Summer, a breif post on the Zillow blog gave the mortgage industry a quick glimpse into the company’s future plans.
We’re working on a new loan service we’ll be launching later this year. Yes, we are being somewhat cryptic as we don’t want to ruin the surprise.
Fast forward to last week when Drew Meyers gave me a heads up concerning a new employment opportunity:
Zillow.com is seeking an exceptionally talented leader to drive our real estate industry development efforts, specifically within the mortgage lender and broker community. Over the past two years, Zillow.com has created one of the most trafficked real estate sites on the Internet and one of the best marketing platforms for industry professionals. As such, the Director, Industry Relations – Mortgages will serve as a face of Zillow as he/she identifies and cultivates strategic partnerships in the mortgage industry.
It would have to be a pretty great job to get me to move out of Colorado, but I submitted my resume. The main reason is because I really like what Zillow is doing in real estate and I think they can also be a positive power in the mortgage sector. I have my own ideas of what Zillow Mortgage will should be, but I’m interested what others think. Based on how they have operated on the real estate side, I think the core plan for moving forward will include the following:
1. Informing the consumer – the obvious answer would be focused on rates, but I have a different idea.
2. Advertising – will it be traditional banner ads, sponsored territories, a competition platform like Lending Tree, or will they come up with something else?
3. Community – Zillow’s Discussions forum will likely play a part on the mortgage side, but how so?
I’ve actually already written the post on what I’d do, but it occured to me that I may want to save that in case I actually get interviewed for the position. In the mean time, what do you think the future holds for Zillow Mortgage?
Interesting developments, Todd. Good update.
Zillow moving into mortgages is a strong corporate move because of the ad revenue. And, until the strategy is defined, I can’t comment on how it would impacts consumers.
But — as you know from your experience as an originator — consumers need help in making mortgage decisions. Even the experienced ones.
I liken it to E*Trade.
Many “laypeople” use E*Trade and make a lot of money without the help of a financial planner.
Many more LOSE money, however, because they’re building a long-term portfolio without short-term guidance on technical factors, tax planning and financial reviews.
In other words, just because a person can read information online and have the bullet points to make a decision doesn’t mean that they know how to INTERPRET what they’re seeing, or how it fits into long-term planning goals.
I’m not the only one that bought Yahoo! at 400 and ignored Google at 200, am I?
Very interesting, Todd. I had the opportunity to visit Zillow with Blog Tour USA… I wonder if they’ll use zestimates in lieu of appraisals?
I think mortgages are a logical step to an eventual brokerage firm, which is zillow’s master plan.
Anything they add that will dillute the zestimate is good for them.
I would love to give my opinion on how to best do this mortgage thingee, but they have never listened to me before. Besides, they’d have to pay me
Here are my top of mind thoughts:
1. Avoid the HouseValues path in moving into the mortgage market
2. Understand the real estate generated lead is a far longer sales cycle than most mortgage LOs have the attention span or system to manage (see #1)
3. Leverage what you are already doing well–home values, community interaction
4. Mortgage LOs love the Zestimate for validating borrower estimated home values (see #3)
5. Help LOs build a purchase business (plan)–they have been doing refi only for 7+ years
6. Advocate, build on something they already know and believe in–building a Realtor network (community/social network)
Finally, walk toward their woes–understand the way they do business today. Don’t toss the promise of a silver bullet in their lap and hope they use it–they won’t, I know, they are my clients.
Todd does this mean you are going into the online lead generation business
What timing…I’m heading up to Seattle today, and will hopefully strike an informal meeting with Drew and David G. (Galen Ward is trying to set it up)…
Like you Todd, I wrote a post about the big Z’s foray into the murky waters of the mortgage industry, which was a segue from a comment I made to one of Gregs posts on the BloodHound Blog…
It centered around what I hope they didn’t do, here’s the clip:
“On the mortgage side, if your Spidey-Sense is correct Greg, the fundamental problem with Zillow’s approach is that the accuracy and quality of information is still in the hands of the service providers (mortgage brokers/bankers) that are spewing the data. By spewing I mean vomitous waste.
Zillow already allows Bankrate and LendingTree to advertise on their site…both perpetrators of grievous misinformation practices, with pending and settled litigation cases to back it up. So I doubt they’re concerned with the ethical standards of other 3rd party providers and the information they provide.
I fear that Zillow’s plans will only cause further confusion and misinformation for consumers in the market for a mortgage and/or related information. Zestimates have proven to be guesstimates at best, but are pretty innocuous by themselves. However, coupling cursory housing values with similar quality financial and interest rate data would produce some monumentally miZleading information.
This is what happens when a ‘real estate company’ is run by Tech Geeks…Don’t get me wrong, I like Tech Geeks and love technology, however, improper automation in the real estate and mortgage service industries does far more harm than good…”
Disclaimer: I write very tongue in cheek…I’m also a big advocate of Zillow and what they’re trying to do…
They have a record of consistently trying to improve the overall experience for consumers and professionals alike, acknowledging that they learn and adapt as they go. Every person I’ve met from the company seems very genuine and smart about the business.
As my comment states, I just hope they don’t leverage mortgage data from the wrong places and implement it in a frivolous fashion.
Good luck with the job, you’re certainly qualified!
@ Dan….I actually suggested shorting Google at $200 to someone…hope they didn’t take my advice..lol
Zillow is nicely positioned for a next generation mortgage effort. I would let early entrants like MortgageBot’s MortgageMarvel, stumble around first. Timing I think will be optimal in 2008 as we (hopefully) start to see the bottom. Presuming Zillow agrees that a homeloancenter approach is not the way, the largest stumbling block here are loan officers/ mortgage brokers themselves, who will play ball now and abandon ship later when the market improves.
To be perfectly honest, I have not given much if any thought to Zortgages. As a real estate agent, I’d have to say that the feedback I get from clients that chose to use an “internet” lender is *overwhelmingly* negative. eLoans, which has a brick & mortar presence in Phoenix seems to be the lone exception.
That doesn’t mean they won’t /don’t/can’t work.
I don’t know if Z is looking to actually get into mortgages or real estate brokerage, or if they are simply expanding their advertising base.
Zillow has the capability to deliver information in mass to consumers. There is a lot more to a loan than the rate, though that is typically what Joe Consumer focuses all their attention on.
*IF* Z can reach out and truly provide the consumer with tools to compare, and understand, loan products across different lenders, then that could be a powerful thing.
However, given that a significant portion of the consumer population out there sees Zestiamates as full blown (and accurate)appraisals, I’m not holding my breath.
Could Z become a place for lenders to effectively advertise and market their services? Absolutely. It’s clearly not a bad place for a realtor to advertise, why not lenders?
My only comment to the powers that be is that I strongly advise against the ‘Mortgage Zillow’ brand name of Mozilo.
Now, THAT’S good humor.
Todd – great post. I’m dying to hear your thoughts – both on what we have built and where you imagine the opportunity to be.
Dan – I feel your pain; I let someone talk me out of buying AAPL at $50 a year ago.
Ronda – Zestimates are no substitute for an appraisal.
Joe – as you know, Zillow has no plans to broker houses … or to start taking your advice seriously for that matter
JeffX – we’re looking forward to seeing you and agree that the mortgage space doesn’t need more frivolous “solutions”.
Paul – interesting comment on timing. I hope you’re right.
Jay – my hope is that ours is an online mortgage solution you will recommend to your clients … and I’m cautiously optimistic that it will be.
I am with Dan Green on this one as “cookie cutter” approaches to “unique” situations ultimately cost more than seeking solid mortgage advice.
That being said, Zillow could take the lead and provide something far superior than Lending Tree, Bankrate, etc. and provide a viable tool to both the consumer and the LO. Unfortunately, I am skeptical they will be able to pull it off, so I hope they prove me wrong.
Dan – I agree with you about the E-loan analogy. To set themselves apart, I think Zillow needs to find a way to facilitate qualified advice form originators to consumers.
Joe – I don’t know if it was always the plan, but looking back, it appears that the Zestimate was conceived largely as a way to drive consumers to Zillow’s site. They offer a free and anonymous way for consumers to begin the home buying/selling experience. There’s a way to do that on the mortgage side that, unlike most competitors, does not focus primarily on interest rates.
Bill – It would be the first time I sold online marketing solutions. But I still think working with RE agents is the best way for LO’s to succeed. Zillow could play a part here as well.
Jeff – I think the biggest problem with BankRate type models is that, since the lender does not have enough information to accurately quote a rate/program, they all feel pressure to out promise each other. These lenders remind me of the current crop of politicians running for office. It’s easy to out-promise everyone else when you can fall back on “not knowing all the details” until you’re in the White House.
If you are serious about wanting to save your home, preventing the foreclosure is going to require finding the money to make up all of your missed payments. This will stop foreclosure, regardless of how far along the process is, as most state laws require that your lender accept a full repayment of arrears.
Zillow allows users to see the value of millions of homes across the United States….. this is giant!
Todd – Excellent job on getting the ball rolling on this intriguing subject. I agree with the folks here who say that there hasn’t been a suitable online gateway for mortgage information for consumers yet. The problems are myriad from misinformation, bait-and-switch and lack of transparency, to name a few.
If Zillow wants to Zillowfy this process they are going to have to eliminate the above problems and rewrite the rules of what it means to be a conduit between the general public and mortgage lenders.
I think Zillow has an opportunity to do that by leveraging the things that it does best and by being the un-lead generator.
I’ve got some ideas myself on how they might do that; but they need to be hashed out in a longer space – so I’ll ping you when I get my thoughts up online.
alright todd – you got us started, i went long.
I encourage everyone to go visit Morgan’s post on Blown Mortgage. He and I are very much on the same wavelength here.
zillow mortgage? didnt know they started a mortgage company.
I like their feature which allows you to add new features to your home to see a more accurate price. It also tells you the recent homes sold in your area….and you can always check to see what your neighbor bought it for!
just a quick update. I finally shared my ideas in a new post today
http://blog.mariah.com/2007/11/how-id-build-zillow-mortgage-part-1/
I am so execited! I can’t imagine that such things exist!!!
No sure I share your enthusiasm, the next Walmart is rearing it’s head
Zillow is positioning itself to be a strong merger/acquisitions candidate.
It’s really interesting to see how Zillow is changing their business model infront of our eyes, the foreclosure crisis and this recession have everyone scrambling for something new, that works.
With the launch of the Zillow Marketplace they’re bringing down the information walls between buyer and seller, and let’s hope the community section will be of aid to homeowners facing foreclosure.