Overview:

For today’s homebuyers, there are countless ways to browse potential homes: Zillow, realtor.com, Trulia… You could have a whole folder on your smartphone just for these home buying apps.

That means for mortgage lenders, there are countless sources to buy potential leads from. For real estate agents, about half of them that purchase online leads don’t actually see a return on their investment. And which sources of leads are profitable for mortgage lenders?

In this blog, we’ll reveal the truth about buying leads from Zillow and introduce you to a more profitable option.

The Truth About Zillow: 

When Zillow launched in 2006, its Zestimate was its claim to fame. The Zestimate was a lead generation tool that attracted consumers by giving them a starting point for determining what their home—or any home—is worth. As you probably know, Zestimates are hugely inaccurate and cause headaches for lenders and agents alike because customers do not have a realistic idea of the true value of the home they are selling or buying. Now, billions of dollars are being spent with Zillow for real estate lead generation, but those leads are largely not being converted into actual sales because of poor lead quality. Just imagine how easy it is to browse homes. All you have to do is submit your contact information (which may be fake) and bam—you can view a countless number of homes from your phone without actually driving around and going to see them. In fact, Zillow makes no promises to vet these leads despite charging upfront for them. There have even been complaints from real estate agents receiving fake or scam emails. Zillow reports 8.1 billion unique visitors to their site last year, yet only 5.34 million homes were actually sold in the U.S. By their own measurements, Zillow generates over 15 times more unique leads than actual sales. What’s wrong with this picture? Is this process actually providing service providers, home buyers, and home sellers with the experience that they want?

The Truth About Zillow Continued:

Leads from Zillow are also extremely expensive, highlighted by the $2.7 billion in revenue they generated last year. The price per lead ranges from $25 to $250+ a piece, with a complex process of determining how much you’ll actually pay. Zillow calculates their pricing on the median home prices in your zip code, with more expensive markets demanding more per lead. They also factor in the number of agents in your market (who may purchase the same leads as you) as well as your advertising budget. The minimum commitment is usually at least 6 months with a $500 monthly minimum spend. Most markets demand well over $1,000 a month to get decent quality leads. You also “get the option” to pay more per lead, to get “better or preferred” visibility so home searchers see you first and/or more often. 

Zillow Directly Competes with Lenders & Agents:

Mortgage lenders “co-sponsor” the cost of lead generation with local real estate agents to earn a shot at their business and to work with local home buyers. Mortgage lenders also pay Zillow based on cost per click (CPC) or cost per thousand impressions (CPM) to advertise directly to home shoppers. Zillow now directly competes with its lending customers by offering lending services, expedited by its purchase of online lender Mortgage Lenders of America in 2018. Zillow Home Loans quintupled its mortgage origination revenue last year to $100 million in just the second year of offering mortgages. Zillow also competes with its own agent customers by offering Zillow Offers. Through this program, Zillow directly bought and sold over 10,000 homes last year for $1.4 billion in revenue. Customers can use this “iBuyer feature” to send Zillow details of their home, and the company responds with a cash offer within days. The customer can accept Zillow's offer and bypass using a real estate agent altogether. If the customer decides not to accept the offer, Zillow is happy to sell the customer’s information to list their home with a local agent that Zillow connects them to. Nonetheless, Zillow is also in the process of adding title and escrow services as an additional competitive service through Zillow Closing Services. Zillow recently reported they now have approximately $900 million in undrawn credit facilities and lines of credit to further support the growth of Zillow Offers, Zillow Home Loans, and Zillow Closing Services.

Zillow Directly Competes with Lenders & Agents Continued

Zillow's guiding strategic principle is that it must be consumers' first destination in the home buying and selling process. Zillow's sustainable competitive advantage lies in its massive audience and strong position at the start of the consumer journey. This structure leads to heavy competition and fatigued leads who don’t want to hear from another solicitor. Fortunately, there’s an alternative. You can break the cycle and give your customers the better home buying experience that they are demanding.

Get Your Leads From HomeTraq

HomeTraq is a tool that can help you proactively secure lending opportunities. In the same way that you use Uber or Lyft to quickly find a driver to get a ride, house hunters use HomeTraq to quickly find agents to easily schedule a tour in an average of 3-5 minutes. This is a great alternative to agent-centric ways to schedule showings, such as Zillow, even though they are typically time-consuming, slow, and inefficient. Lenders also lose 93% of mortgages from their own customer base every year to agent referrals. Without HomeTraq, lenders only capture less than ½% of the mortgages from their own customer base each year. But with HomeTraq’s 50% conversion rate of home showings eventually leading to closing, we can help you regain the offensive position to win mortgage business faster than your competitors. HomeTraq thus solves the problem of re-capturing substantially more mortgage opportunities from your current customer base. And now, your clients can use HomeTraq to schedule an InPerson Private Home Tours or stay safely at home and schedule a Live Video Tour of a for-sale home. A Live Video Tour gives the agent the ability to narrate and walk through the home while they answer your clients’ homebuying questions using the camera from his or her smartphone.

Get Your Leads From HomeTraq Continued

You also won’t have to compete with other mortgage companies or banks for your client’s business. During the home tour, the agent is prohibited to refer the client to any other mortgage company or bank. Both the agent and the client see that you have sponsored this home tour, and the client is encouraged to use your digital mortgage solution, which is provided within the HomeTraq experience. All the while, you get home shopping alerts sent immediately to your inbox. So what are you waiting for?

Let’s talk about how HomeTraq can provide you with the best leads.