Zillow Mortgages is essentially a free open marketplace
Posted by Pat Kitano at 4/2/2008 9:47 PM 
Categories: New Business Models, Lead Generation, Cool Web Tools
Categories: New Business Models, Lead Generation, Cool Web Tools
Zillow unveils its long awaited mortgage service today - it's essentially an online marketplace connecting the consumer with lender. And more important, it redefines lead generation from being a pay-for-play transaction to a free quote response system. Traditional lead generation models gather consumer data and sell them as leads - the consumer loses because their confidential personal data is distributed to persons unknown, and they become the recipients of unwanted phone calls. With Zillow, the consumer makes a request for quote, receives quotes from lenders registered and qualified with Zillow, and makes the decision to initiate contact.
Here are a few more revolutionary features about the model:
- No lead generation fees. Zillow's stance is to leverage higher CPM advertising directed to individuals purchasing homes or loans.
- Mortgage brokers are rated by consumers after contact is made and after transaction completed.
- In order to attract consumer and receive good ratings, it behooves the mortgage brokers to take time to prepare a polished, customized quote similar to an RFQ proposal.
- The quote are transparent to everybody! Other consumers
and other lenders can review all submitted quotes (although consumer
identity remains disguised) - (update: after submitting a sample quote to Zillow, I couldn't see other quotes from other borrowers... I still think that is a good transparency feature)
- Entrepreneurial lender operations can make a reputation
on Zillow by offering extremely competitive quotes backed by good
servicing in order to receive high ratings. Once that branding is established, the lender can adjust the model towards greater profitability.
- Will there be legions of mortgage brokers across the
nation in front of PC banks responding with quotes to every consumer
inquiry? Will it be wildly successful as a free lead generation tool?
- Can the system be gamed? Can lenders create false consumers to request quotes and then reward themselves with good ratings?
The model will make lead buying obsolete as long as Zillow can stay in business by giving it away for free.
http://blog.homegain.com/homegain-cries-flattery-zillow
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Pat
You wrote:
Traditional lead generation models gather consumer data and sell them as leads - the consumer loses because their confidential personal data is distributed to persons unknown, and they become the recipients of unwanted phone calls.
With Zillow, the consumer makes a request for quote, receives quotes from lenders registered and qualified with Zillow, and makes the decision to initiate contact.
HomeGain's agent evaluator program works in the consumer's favor as the consumer remain annoymous.
I can take your sentence and just substitute HomeGain for Zillow.
With HomeGain, the consumer makes a request for a proposal, receives proposals from real estate agents registered and qualified with HomeGain, and makes the decision to initiate contact.
The only thing Zillow is doing new here is providing the service for free.
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It will be very interesting to see how successful this is. It's nice how they are shielding the consumer from being contacted unnecessarily, but I wonder if lenders and mortgage brokers will be willing to do the work to get the consumer to contact them?
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