The Impact of Zillow Mortgage Leads on the Real Estate Market

In recent years, more and more home buyers have turned to online resources to assist them in their search for a new home. A pioneer in this movement has been Zillow, one of the most visited real estate websites in the United States. In addition to providing listings of properties for sale, Zillow also generates mortgage leads for lenders. In this article, we will explore Zillow’s mortgage lead generation strategy’s impact on the real estate market.

The Rise of Zillow Mortgage Leads 

Zillow launched its mortgage lead generation program in 2010, providing lenders with information on potential homebuyers who had completed a pre-approval application on the site. The program was an immediate success, with lenders eagerly signing up to receive leads from Zillow’s millions of monthly visitors. In a report from Inman News, Zillow’s mortgage business generated $417 million in revenue in 2018, making up nearly 40% of the company’s total revenue that year.

Increased Competition among Lenders

The availability of Zillow mortgage leads has created a more competitive lending environment. As more lenders vie for the same pool of potential homebuyers, they are forced to become more competitive in their loan offerings, such as lower mortgage rates, to attract borrowers. This has led to benefits for consumers, as they are presented with more options and better rates from lenders.

A quote from Anthony Casa, Chairman of the Association of Independent Mortgage Experts (AIME), in a recent report from Housing Wire, highlights the benefits that increased competition among lenders can bring: “The more competition there is in the mortgage industry, the more consumers win as they have more options to choose from and lower rates.”

The Use of Digital Tools 

Many lenders have embraced digital tools and resources to streamline their loan process to stay competitive in the age of Zillow mortgage leads. Digital tools play a significant role in reducing the amount of paperwork required for mortgage applications, which helps speed up the loan approval process.

Some digital tools and resources listed on MortgageRateGuru.com include automated underwriting systems, credit score analysis, and online mortgage calculators. By utilizing these tools, lenders and brokers can process loan applications faster and more efficiently while providing a smoother experience for borrowers.

Potential Risks 

While the benefits of Zillow’s mortgage leads and the use of digital tools for lenders are clear, there are also potential risks to consider. One such risk is increased scrutiny from regulators, as the use of consumer data for mortgage lead generation and lending process automation comes under greater scrutiny.

Another potential risk is the reliance on Zillow for leads. As Zillow’s mortgage lead generation program grows, lenders may become too reliant on the program, potentially decreasing their investment in other sources of information, causing a lack of diversity among their customer base.

The Impact on Consumers 

Ultimately, the impact of Zillow mortgage leads on consumers is a mixed bag. While the increased competition among lenders may lead to lower mortgage rates, some borrowers may still find the fees associated with using a mortgage broker or lender to be higher than necessary.

However, the use of digital tools and resources can provide significant benefits to consumers. For instance, online pre-approval forms make it easy and quick for borrowers to find out if they are eligible for a loan without having to go to a lender’s office. Additionally, digital tools such as mortgage calculators provide potential homebuyers with a more precise estimate of their monthly payments and affordability.

Closing Thoughts

Zillow’s mortgage lead generation program has disrupted the traditional mortgage lending process. The increased competition among lenders has created benefits for consumers while using digital tools and resources has streamlined the loan process for many lenders. However, there are potential risks to consider, including regulatory scrutiny and reliance on a single source of leads.

To stay ahead of the competition, lenders and brokers must continue to invest in technology and digital tools to provide a better experience for their borrowers. MortgageRateGuru.com lists multiple examples of valuable digital tools and resources that lenders and brokers can utilize to improve their lending process in the age of Zillow’s mortgage leads.