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Zillow’s Mortgage Referral Program



Zillow Mortgage

The Zillow mortgage is about to launch and the first phase is already underway. Several industry bloggers have covered the main features of the coming Zillow mortgage offering and I’m not going to rehash it here. The first phase apparently involves loan officers registering on Zillow to receive free Internet consumer referrals. This includes a $25 fee for background check and the LO is added to the registry only after they pass a certain litmus test. It goes without saying that not all LO’s will be allowed to receive this free service.

At first blush there is nothing to dislike about the coming Zillow mortgage model. They are promising “a model of openness and transparency”, which can only be a good thing in today’s market. I sure hope Zillow can play a positive role in improving our industry and in that endeavor I can only offer support.As far as registering and participating in the Zillow database the only barrier is a $25 charge. Honestly, at this point I don’t see any reason not to sign up. Assuming I get approved, I will however closely monitor the type of referrals being received and the closing ratio of these referrals.

More than the closing ratio the main sticking point for me will be the quality of the referrals. If it’s turns into an e-mail stream of rate shoppers then I will have to say “no thank you”. I have competitive rates and can broker to anyone, but I don’t have the time to deal with constant rate quotes and only rate quotes. My expertise doesn’t boil down to the market interest rate. I offer more than just a faxed Good Faith Estimate.

With that in mind, the closing ratio of a referral system is also very important to me. I’ve found that when it comes to the Internet, it’s relatively easy to generate a response from consumers. I receive about 4-5 “good” leads every week from my blog and website. However, compared to a past-client referral or a networking partner referral these “cold” referrals have a much lower closing ratio. Is this good or bad? Well, I don’t’ know, but being busy for the sake of being busy is not the most profitable way to run a business.

Without knowing anymore than a rough sketch this is all I can comment on at this point. I do however have a few questions:

  1. Will Zillow monitor the quality of the service offered by their registered LO? Will this then determine an internal ranking and referral order? I would think in the long run this will be the key element in delivering consumers a quality product.
  2. Is the same referral going to multiple LO’s at the same time? If so, how many?
  3. By “endorsing” the LO’s in their database are they then telling the consumer that they will bear a certain responsibly if a deal goes south?

What about you? What kind of questions do you have? Or answers?

Writer for national real estate opinion column, focusing on the improvement of the real estate industry by educating peers about technology, real estate legislation, ethics, practices and brokerage with the end result being that consumers have a better experience.

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  1. Maureen Francis

    March 7, 2008 at 12:31 pm

    My only thought is that for $25 cost of entry, Zillow could not begin to screen the leads for quality. I am guessing you will get mostly people who want a gfe.

  2. Chris Johnson

    March 7, 2008 at 3:22 pm

    What a good time. I think that one could automate the GFE and make this turn key, possibly, if they see the Yield at an attractive rate curve or whatever…Just a thought.

  3. Mike Farmer

    March 7, 2008 at 4:50 pm

    I think it’s just the beginning — my bet is that it will turn into a managed, quality-controlled referral network, but it’ll cost more than $25.00.

  4. Rhonda Porter

    March 8, 2008 at 1:06 am

    Zillow is requiring a SS# from applying LO’s and is having a third party do background checks…it’s a start. But I do agree, there are more questions than answers at this time. I was “under embargo” until 9 pm last night…and my best questions had to go answered when David G/Zillow was giving me the scoop.

    I’m one curious cat.

  5. Benn Rosales

    March 8, 2008 at 3:49 am

    “Will this then determine an internal ranking and referral order?” I pray that they come up with a more 2.0 way of doing this… this score and rank gets you the worm stuff doesn’t mean its a great lo.

  6. Greg Cremia

    March 8, 2008 at 9:49 am

    Not catching the meaning of a GFE immediately I googled it. I never met a lender offering this level of service so I had to use my brain and figure out what it means in the world of lending.

  7. David G from

    March 8, 2008 at 2:16 pm

    Shailesh –

    Great post. I’ll do my best to address your questions:
    1) To avoid confusion, the confirmation process is merely about entry to participate in this product. Beyond that, we’re going to do our best to put the consumer in control of their mortgage shopping experience – which implies more transparency. Can’t say more than that – how do you think loan originators should be measured?
    2) No, but Zillow will also not limit lenders’ access to borrowers in any way. You’ll see what I mean when we launch in a few weeks.
    3) No, to be clear, the application process doesn’t endorse the loan officer in any way, it’s just confirmation that they are a loan officer. That’s not to detract from the integrity of the confirmation process. We reserve the right to refuse access at our discretion and I’m very glad that we are doing it. Zillow’s Lender confirmation should send a message to borrowers that they aren’t wasting their time on Zillow. And that trust should in turn attract a higher quality opportunity for lenders.
    Shailesh – I look forward to your feedback on the whole product; email me if you’d be interested in getting a preview.

    Mike –

    We don’t plan to charge loan originators (beyond the $25 application fee.) I do however recommend that mortgage brokers look into EZ Ads. More than 1 million of Zillow’s visitors will need a mortgage within the next 6 months (according to our monthly user survey.)

    Benn –

    We hear your prayer and heard the same thing from brokers in our focus groups. The confirmation process is just about getting your foot in the door.

    Maureen –

    We’re betting that putting the borrower in true control of their mortgage shopping experience will yield higher quality opportunities for borrowers. Time will tell.

    All –

    I’m sorry I can’t be more transparent about this – it’s not like me – but I promise it will be worth the wait.

  8. Mike

    March 15, 2008 at 1:00 am

    This is great!! Only $25 I don’t think it’s too much but is it worth??


  9. Hunter Jackson

    June 30, 2008 at 9:21 am

    How does Zillow mortgage seem to be sizing up for everyone? I havn’t heard too much on it recently.

  10. robin | fort Lauderdale Real Estate

    June 30, 2008 at 10:34 am

    Hey Hunter, Did you hear the David Gibbons interview on Real Estate Radio last week? It was pretty cool hearing from him and how their ability to get the numbers more accurate are shaping up. Check it out. In my area prices fluxctuate wildly because of the waterfront props but inland it’s pretty accurate.

  11. Jennifer in Louisville

    July 3, 2008 at 5:38 am

    I’m curious as well. Has anyone heard anything regarding this program? I’ve not heard a peep from anyone. I’d be very interested if anyone has feedback from actual users.

  12. David G from

    July 3, 2008 at 8:16 am

    Hunter, robin, Jennifer –

    With almost a quarter million quotes submitted, the Mortgage Marketplace is far more vibrant than we’d imagined. More than 3,000 lenders are confirmed to quote loans on Zillow. I’ve met several lenders that have closed 10+ loans via Zillow since we launched; the marketplace is definitely working, for both lenders and borrowers. As Compete reported yesterday, traffic to Zillow Mortgage Marketplace continues to grow;

    There have been a few surprises and moderating the mortgage community is keeping me busy. I could write a book about the ways lenders and borrowers have reacted to the transparency we’ve brought to mortgage quotes. Zillow Mortgage Marketplace has truly changed the way people shop for mortgages and it’s been awesome to see lenders embrace transparency, develop a passion for improving the quality of the borrowers’ experience on Zillow and learn from each other. That said, transparency, honesty and accuracy certainly does not come easily for all lenders and I’ve had the pleasure of showing a few of them the door.

    The feedback we receive from mortgage marketplace users is phenomenal. Our product team has made several tweaks based on user feedback since launch and the marketplace continues to evolve. Because the marketplace has been so busy, we’re now able to publish live, current mortgage rate information and will soon be distributing that content for you to use. I just wish mortgage rates would come back down again. You can find the rate explorer tool here:

    For more feedback from folks using ZMM, I suggest you check out the discussions in our Mortgage forum and maybe ask this question there:

  13. Jennifer in Louisville

    July 3, 2008 at 9:57 am

    250,000 quotes is actually quite a decent number for whats amounted to essentially 3 months or so, particularly in a relatively soft real estate market nationally. It will be interesting to see if that rate of submittals goes up/down, or holds steady. And I’m with you on the wishing mortgage rates would come back down some again. They are still fairly low relatively speaking, but a lot of people have gotten used to the really low rates, so their perception of what is high is somewhat skewed right now.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?



NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<


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Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.



young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.


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Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.



gas tax


Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.


Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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