Irony Of Ironies: The Mechanical Turk Behind The

April 2, 2008

Zillow, the perennial surprise-maker of online real estate, has just launched its long-anticipated foray into the mortgage world with a “Mortgage Marketplace.”  The company’s original online real estate product — the controversial “Zestimate” — is a computer algorithm estimating the value of homes.  The logical mechanism behind a “Mortgage Marketplace” would thus also be a computer algorithm — say, a mortgage pricing engine that spits out rates from lenders based on the borrower’s situation.

In a delicious twist of irony, however, the mechanical Turk behind this new product is … a person.  As in, homo sapien.  Specifically, a mortgage professional.

In a pre-launch briefing with “What would David Gibbons do” David Gibbons, he described the all-too-typical grief that a potential borrower goes through with many lenders, whether online or offline:  bait-and-switch salesmanship, hidden fees, inflated rates, and perhaps most egregiously, a complete lack of anonymity.

Zillow’s solution?  Let consumers ask for mortgage quotes without revealing their name.  Let mortgage brokers respond to these requests.  Let consumers sift through the responses and choose the broker they want to work with; then and only then does the buyer have to reveal his or her name.

What about the whole bait-and-switch thing?  Zillow deals with that in a very Web 2.0 way — consumer reviews of mortgage broker performance.  Plus, the participating mortgage brokers are vetted — at least minimally — to confirm that they are, in fact, licensed mortgage brokers.

And here’s something sure to make at least some mortgage brokers sweat a bit:  the competing mortgage offers are visible not just to the consumer who requested them…but also to the other mortgage brokers who submitted offers!

The cost to mortgage brokers?  Zero.  In David’s words, Zillow remains committed to being an advertising platform.  The data they can now gather about consumers — what their home is worth, other homes they’re interested in, and now their income and credit score — makes it possible to target-advertise with nearly pinpoint precision.  David assures us this is not being done in a “Big Brother” kind of way, but if I understand him correctly it may soon be possible, for instance, for Mercedes to target ads that will appear only in front of prospective buyers with an income of at least $100K and a credit score of at least 720.

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Written by Kevin · Filed Under Consumer, Industry 

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7 Responses to “Irony Of Ironies: The Mechanical Turk Behind The”

  1. Zillow Officially Launches the Zillow Mortgage Marketplace | Personal Insights on Web 2.0, Blogging, and Business on April 2nd, 2008 8:45 pm

    [...] Kevin Boer over at 3Oceans posts “Irony Of Ironies: The Mechanical Turk Behind The “Zestimate of Mortgages” Turns Out To Be Not An…“ [...]

  2. Zillow.com’s long-awaited mortgage lending service offers anonymous customized loan quotes to consumers, affording loan originators the opportunity to compete transparently for free mortgage leads | BloodhoundBlog: Real estate marketing and technolo on April 2nd, 2008 8:49 pm

    [...]  Elsewhere: Todd Carpenter, Rich Barton, John Cook, Drew Meyers, TechCrunch, Rhonda Porter, Spencer Rascoff, Joel Burslem, Kevin Boer. [...]

  3. Zillow.com Releases Mortgage Marketplace | The Phoenix Real Estate Guy on April 2nd, 2008 9:11 pm

    [...] Opine: Todd Carpenter Drew Meyers Kevin Boer Greg Swann Joel [...]

  4. agentgenius.com- national real estate opinion column » Blog Archive » Zillow One-Ups Lending Tree With Mortgage Marketplace on April 3rd, 2008 8:10 am

    [...] to Zillow’s launch has been fairly positive, though Joel Burslem asks whether the information the consumer receives may be too overwhelming [...]

  5. Zillow Mortgage Marketplace is Lead Generator for Mortgage Lenders on April 3rd, 2008 8:33 am

    [...] PhoenixRealEstateGuy; 3Oceans;TransparentRE; Lenderama; RCG (Rhoda Porter); SeattlePI (John Cook); Blown Mortgage; [...]

  6. Zillow.com’s New Algorithm for Gaining More Share of the Real Estate Industry | Real Life Real Estate Blog on April 3rd, 2008 11:11 am

    [...] Zillow.com is adding yet another “user friendly” element to their website.  Kevin Boer goes into great deal about it in an article on his site, 3oceansrealestate.com. [...]

  7. Zillows Mortgage Community. The Consumer is Ready, But is The Mortgage Professional? | The XBroker Mortgage Real Estate Marketing Technology on April 3rd, 2008 6:37 pm

    [...] 3 Oceans [...]

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