Sign up below for a free subscription to The Niche Report,
delivered to your door every month, absolutely FREE.
The Niche Report is a highly targeted mortgage finance trade magazine nationally circulated every month to 20,000 (with a reach of over 50,000) licensed mortgage brokers, loan officers and mortgage professionals.
The Niche Report talks with Mary Miller, Director, Product Management, Mortgages of Zillow.com.
What is Zillow Mortgage Marketplace?
Zillow Mortgage Marketplace is an open and transparent lending marketplace that provides borrowers a hassle-free, anonymous way to receive unlimited and customized mortgage quotes directly from lenders, for free. When lenders (banks, originators, loan officers, brokers) respond with customized quotes, borrowers compare the quotes, review lender ratings and profiles, and then decide whom they want to contact and when. Since borrowers are anonymous to lenders, they are not inundated with unwanted phone calls and email messages.
Why did you expand Zillow to go into the mortgage space?
We launched Zillow.com® in February 2006 with a simple premise: empower consumers with information so they can make more informed real estate decisions. On Zillow, homeowners, buyers, sellers, real estate agents and mortgage professionals find and share vital information about homes, such as Zestimate® home values and data on millions of U.S. homes. Zillow has since become one of the most-visited U.S. real estate Web sites, with nearly 9 million unique visitors each month. Zillow's goal is to help people become smarter about real estate in every stage of the home ownership process-- buying, selling, home improvement and financing.
Zillow Mortgage Marketplace is a logical extension of Zillow, as financing a home is one of the largest investments most people will make in a lifetime. Zillow Mortgage Marketplace helps borrowers through this complex process and empowers them to find the right loan for their unique situation, while also providing an extremely easy way for lending professionals to connect with prospective clients online.
What are the benefits to borrowers?
Zillow Mortgage Marketplace works by empowering consumers with free data and an open and transparent marketplace where they can efficiently shop for and compare loan quotes on an apples-to-apples basis. We make the shopping experience hassle-free for borrowers, primarily by keeping their identity hidden until they're good and ready to contact a lender. We also provide features like help articles, blog posts, mortgage calculators, real-time mortgage rates, sort and filter tools, True Cost calculations, and loan detail graphs to help borrowers make decisions.
Why would lenders want to participate in Zillow Mortgage Marketplace?
For lenders, Zillow Mortgage Marketplace offers many benefits. Lenders can respond to an unlimited number of loan requests from borrowers, and currently, Zillow receives approximately 50,000 loan requests each month. To help focus their efforts, lenders can search for requests with specific criteria—such as loan type, loan amount, LTV, credit rating, etc.—and then receive email alerts when new loan requests are submitted that match their criteria.
Once borrowers review lender quotes, profiles, and reviews, they decide which lenders they want to contact and when. Since borrowers contact lenders and not vice-versa, these contacts close at an extremely high rate (more than 10%) because the borrowers are ready to transact. This saves lenders valuable time from chasing weak leads. Borrowers who contact lenders on Zillow Mortgage Marketplace are not traditional cold mortgage leads; instead, they are very warm Customer-Initiated Contacts.
What’s Zillow’s revenue model?
Zillow’s overall revenue model is advertising. We give away lots of tools, data and information for free, because we feel that sharing information on homes, buying, selling, home improvement, and financing will help everyone make smarter real estate decisions. Because we do all of this, we get millions of people visiting our site each month who want this information. This provides lots of opportunities for advertisers who want to get their message in front of these people, too. So they buy ads, choosing from a myriad of different advertising opportunities.
Within Zillow Mortgage Marketplace, lenders pay for targeted advertising via the Customer-Initiated Contacts they receive. Lenders submit an unlimited number of loan quotes for free, and then they pay a fee when borrowers contact them about their quotes. The price for Customer-Initiated Contacts is shown as part of the loan request, so lenders use this information to decide which requests to quote, and they can set a maximum price to pay per contact.
Compare this to traditional lead generation, where lenders are required to pay upfront for a potential borrower’s contact information, then they have to invest a lot of time and effort in calling on those cold leads. Often, the borrower doesn’t even realize that his name has been sold multiple times, and therefore isn’t receptive to the multitude of phone calls and emails he receives from lenders. On Zillow, borrowers who contact lenders on Zillow are much more ready to transact, since they have already compared quotes, profiles and ratings and have decided to proactively reach out to a selected lender. This results in a conversion rate that’s nine times higher than the industry average.
What controls have you put in place to make sure bait and switch doesn’t happen?
Before being permitted to submit quotes through Zillow Mortgage Marketplace, every participating lender must have their professional status confirmed, create a public profile and agree to be rated. Lenders are also required to comply with the Zillow Mortgage Marketplace Code of Conduct which sets expectations for accurate and honest loan quotes. Zillow Mortgage Marketplace is built on a reputation system, and this helps enforce our Code of Conduct. If a lender offers rates that he then can’t meet, the Zillow community will provide that feedback through their ratings of the lender to deter others from contacting that individual. In addition, mortgage quotes on Zillow are visible to all lenders and lenders are encouraged to flag other lenders quotes if they suspect impossible loan scenarios. Zillow moderators follow up with lenders whose quotes are flagged to substantiate quote accuracy. Lenders found to violate the ZMM Code of Conduct may have their confirmed lender status suspended or permanently revoked.
Has it been successful?
Zillow Mortgage Marketplace is working: borrowers are finding the right loan and lender for them, and lenders are generating new business. When borrowers contact lenders, they have already reviewed their quotes, profiles, and ratings. This results in very high quality new business prospects, with contact-to-close rates of more than 10%. These high success metrics are particularly noteworthy amidst a mortgage environment that has extremely tightened lending standards, making it very difficult for borrowers to get financing.
What makes Zillow Mortgage Marketplace successful?
People don’t want to be leads. They want to be people, not leads. The internet has changed the way people consume information, the way they make decisions, and most importantly, the way they conduct important transactions. Companies like BlueNile, Expedia, WebMD, Schwab and of course Google have trained us to expect to be able to do all of our research in privacy and solitude, to remain anonymous until we're ready to transact. Wouldn’t it be awful if you searched for a hotel room on Expedia, and then all of the hotel reservationists called you? Or if you researched new cameras on Amazon.com, and you got calls from salespeople at Canon, Nikon and Panasonic? We're trained now to expect to be able to access information on our terms, on our own timeline.
Traditional leads are dead. The old model, where Web sites provide as little information as possible in order to entice consumers to fill out a form so they can then sell the personal information to the highest bidder…those days are over. The Customer-Initiated Contact model still leaves plenty of room for professionals to communicate with consumers, but only when the consumer is good and ready. This approach puts the consumer in control, and ultimately that’s better for the professionals in the equation also. First, it means that the professionals only have to talk to the consumers who pre-select them, on their own terms. This saves professionals time and energy, since they don’t have to chase down cold leads. Second, consumers love being in control, and as a result, they use Zillow Mortgage Marketplace to do their mortgage shopping. The success of Zillow Mortgage Marketplace is good for lenders, since it ensures they are investing their time and money with a sustainable business.
