Update - Zillow Mortage Marketplace has launched. My full review is linked.
This fall I wrote a multipart series on how I would build Zillow Mortgage. Today, I see Joel is asking for 2008 Zillow predictions. Limiting my self to just the mortgage side, how I would build Zillow Mortgage and what I think Zillow will do are not the same thing.
What Zillow Mortgage will not be.
It wont be a direct lender, a secondary lender, a mortgage broker, banker, corespondent, or any model that originates loans. Zillow hasn’t disintermediated a single real estate agent, I see no reason why they would try something different with loan originators, especially in the current political and business climate.
Zillow will not be a red pill, or a blue pill. Consumers increasingly distrust the Bankrate model and I’m not entirely sure if Lending Tree will even be around much longer to execute the Lending Tree model. I’ll say right now that if Zillow emulates either of these models, the title of my review for their mortgage product will be, “I was wrong, and Zillow is stupid”.
What Zillow Mortgage will be.
Zillow’s business model is really no different than Google’s. Generate page views, and sell advertising. I don’t think Zillow’s mortgage product will be any different. What the Zillow brain-trust is doing right now is figuring how to develop traffic driving tools like the Zindex and Zestimate for the mortgage vertical.
I’m betting my Zcore idea is in the mix, but here are two other possible tools they might be working on.
A closed loan, localized mortgage rate index. Zillow is already pouring through local data of new home purchases to feed data to the Zestimate. Acquiring the interest rate of the mortgages on these homes is a trivial additional endeavor. I can buy a list of borrowers with 8% mortgages from a leads vendor. What nobody has done before, is make that data available to consumers. Now, I’m not saying they should tell the public the interest rate of each and every borrower, that would anger quite a few people. But they could use the data all the way down to a block by block average, or a neighborhood, town, state…
A interest rate pricing engine. Mathew Kelly’s first post on Geek Estate talks about some of the tools that makes an originator’s job so much easier. Zillow can easily build something similar, but at the consumer level. We’re talking about decade old technology here. Let the consumer enter in the data themselves, scrub it against the same lender provided data that LO’s use, attach an average margin via data from the above index, and viola, you got yourself a consumer grade pricing engine.
I know what every originator reading this is thinking,
“They can’t even get Zestimates right, data on rates is going to be a nightmare!”
But think for a second. It’s not a nightmare for Zillow. It’s a nightmare for you. Zillow is counting on some angry, and vocal loan originators to talk about how irresponsible and incorrect the data is. I think they will be hoping for it. A year and a half ago, real estate agents across the land yelled and screamed about Zestimates, and it translated into millions of monthly page views for Zillow. Now, what did I say about Zillow’s business model?
Mortgage Industry Professionals. Like what you see?
SUBSCRIBE for free by RSS or email, and never miss a post!
{ 4 comments… read them below or add one }
You can bet they will incorporate som esort of controversy as part of their marketing. Wait a minute, haven’t they done that already?
Zillow’s mortgage model is already generating a buzz and that is just over what kind of model they are going to use. Just wait until they actually deliver a product and what kind of a buzz it starts.
I am very curious about how Zillow Mortgage product will be. Iven if you said that it will be very much like Google, it is something new and I want to see it.
I think that selling advertising based on generated traffic is a solid way to monetize a site in any niche. It turns out zillow.com did quite well for themselves this year.
A interest rate pricing engine. Mathew Kelly’s first post on Geek Estate talks about some of the tools that makes an originator’s job so much easier. Zillow can easily build something similar, but at the consumer level. We’re talking about decade old technology here. Let the consumer enter in the data themselves, scrub it against the same lender provided data that LO’s use, attach an average margin via data from the above index, and viola, you got yourself a consumer grade pricing engine.
Leave a Comment