How Zillow is Entering the Mortgage Lending Business

Blog, Mortgage Lending

Zillow Mortgage Lending

Zillow promises to be a one-stop shop for homebuyers if its announced acquisition of Mortgage Lenders of America goes through. The August 6, 2018 announcement heralds a new integration for real estate giant, Zillow. Already strong in buying, selling, and renting homes, apartments, and condominiums, the real estate clearinghouse has always advised prospective customers on the ins and outs of mortgages. Now it will be able to offer them mortgages. Read on to understand what they are doing right and how you can do it better.

Still Supportive

Zillow says it will continue to support mortgage lenders – Connect, Custom Quotes and lender co-marketing – that currently advertise on its site. It plans to grow the lending marketplace for years to come, now with its own brand in the mix, which could ruffle other lenders advertising on the site.

Lock Stock

The move to enter into mortgages directly is not particularly surprising, and neither is the instinct to buy a ready-made lender like Mortgage Lenders of America. It streamlines taking on a new area of marketing and brings into the Zillow fold experienced lending managers.

When other companies have branched into unfamiliar territory through their own efforts, the learning curve has often exacted a steep price on share value. By taking all 300 employees and Philip Kneibert, head of Mortgage Lenders of America, under its wing in one big buyout, Zillow gets the process, the portfolio, and the president.

Though Mortgage Lenders of America may have had a modest business presence — the company only originated 4,400 mortgage loans in 2017 against Zillow’s 23 million loan information requests through Zillow’s consumer brands — it has an existing infrastructure ready for quickly scaling up.

Tightening Grip

The move to absorb Mortgage Lenders of America seems calculated to tighten Zillow’s grip on the national real estate market. It also announced that it will no longer allow other companies to participate in the Zillow Offers program, reports Housing Wire.

Not too long ago — a year and a half — Zillow switched profiles from simply marketing real estate for other buyers and sellers to being a seller. Now it is offering to not only sell you the house it showcases but finance it as well.

Services

Zillow has a broad range of services for consumers. At its site, a home buyer can choose from among multiple-listing service homes, foreclosures, for sale by owner homes, and more.

Renters find safe haven, too, for both apartments and houses. If you need to sell before you can buy, you can still get Zillow’s “Zestimate” of your home’s worth, or find homes by agent or owner. If you are just beginning your exploration, you can also find real estate agents through Zillow.

Consumers have always been able to check out Zillow’s mortgage information, which includes calculators, basics of borrowing, lender reviews, current rates, and much more.

Now, with Zillow selling its own listings, and then offering streamlined mortgage services, homebuyers can do much of their house hunting without ever leaving Zillow’s site. That, clearly, is a major goal for the real estate marketer.

Run for Its Money?

A local mortgage loan officer must acknowledge the stiff competition Zillow brings. For all its national reach, though, Zillow is not nimble in local markets. It relies on local talent to “read the street,” so a mortgage loan officer at a neighborhood financial institution can compete head-to-head on knowledge of the neighborhood. Experts at HousingWire have some advice, too:

  1. Have a local social media presence and market yourself through social platforms
  2. Be a great advisor, not just lender, to homebuyers
  3. Invest in consumer experience tools like Blend, SocialSurvey, MBSHighway, MortgageCoach, and CRMs

Can Zillow swallow local lenders whole? Yes. Will they? Unlikely. You cannot compete against 160 million monthly visits to Zillow’s sites. But you can compete for the attention and business of the next uncertain customers walking through your door. Give them your best effort, keep your eyes focused locally, and you will succeed.

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