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:
- 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.
- Is the same referral going to multiple LO’s at the same time? If so, how many?
- 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?