ELLI and Zillow

Is there anyone here in the real-estate business who would know if there is any possibility that Zillow is actually competing with ELLI in some ways, and taking some of ELLI’s business?

Saul
Ticker Guide

Hi Saul,

I have been a Realtor for 10 years…

Zillow is a lead generation tool for Realtors as well as Mortgage Brokers. Realtor’s and Mortgage Brokers pay Zillow a flat rate monthly to have space (usually by the Zip Code) on the website as a preferred agent/broker. Zillow gets so many visitors to their website every month that Realtors and Mortgage Brokers want to pay $400+ a month to have their information featured. If a visitor has a question about a property or mortgage rates they ask a question via email to one of the preferred agents - the relationship goes from there, some leads turn into clients and some don’t. The better Zillow makes their site… the more consumers will go there for Real Estate information… leading to more demand for Realtors and Mortgage Brokers to be featured… leading to a higher price Realtors/Lenders will pay… etc (if you pay $500 a month and get one client a quarter that is an average paycheck of $6,000 it’s a 4:1 return on marketing dollars spent) - Zillow’s business model isn’t going away, HUGE MOAT.

Mortgage Brokers originate their loans (once they already have a client) through Elli Mae. Elli Mae and Zillow are not competitors, Zillow is a tool to get more clients, Elli Mae is a tool to originate your clients loans more efficiently if you are a Mortgage Broker.

Does this make any sense?!

-Nate
(I’m the moron who sold Zillow at $34 after buying it at $26)

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Thanks Nate, that was very helpful. I guess I was thinking about Zillows new programs Mortgage Marketplace and Mortgage Pre-approval, where home buyers can apply for loans and get loan approvals through them.

Saul

Zillow Mortgage Marketplace continued to grow during the first quarter with 5.8 million loan requests submitted by borrowers, up 29% year-over-year, as reviews of lenders reached nearly 75,000.

During the quarter, Zillow also introduced Mortgage Pre-Approval, a new tool that enables qualified home shoppers on Zillow to get pre-approved for a mortgage quickly and easily, and receive a personalized pre-approval letter in a matter of minutes.

Saul,

These two programs are what generate the revenue from mortgage brokers.

http://www.zillow.com/mortgage-rates/ - check it out… you will see there are various lenders with their rates quoted on there. They are paying good money to be there.

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Thanks again Nate, I’m not in the market to either buy or sell a house so I never use Zillow. Your posts are very useful.

Saul