Guest Post: Are free technology tools really free?

In two and a half years of blogging, I  have had three different readers call me the "Matthew Lesko" of the mortgage industry. I'm pretty sure they meant it as a compliment.  I've offered training, opinions, product reviews, and market news, but more times than not, the subject of a typical post for me is, "Hey check this out... and it's FREE!"

I love free, it's my favorite word, and my preferred label of beer. Everything I personally offer on Lenderama is free. But free is never truly free. The trade off I receive is advertising dollars. For some of the sites and companies I tell my readers to check out, the trade-off is often a sales pitch for a more advanced version of the free stuff. It's important to understand why it's free, especially if you are going to invest your time or brand on adopting it.

If you Google the term "mortgage," it's very likely that mortgage101.com will top the list (it varies throughout the day). One reason this small Web company was able to dominate such a powerful search term was the incredible number of link-backs it has earned by offering a set of free "tools" to real estate agents. These tools included bond market updates, mortgage calculators, and live interest rates from local mortgage originators. Because co-branded tools are hosted on Mortgage101's Web site...

In the interest of full disclosure, I worked for mortgage101's parent company back in 2001. But it's no trade secret to tell you that the trade-off is that the local loan originators pay Mortgage101 to be listed on those real estate sites. Agents who adopt these free tools are actually promoting paid advertising from their own Web site. The trade-off is fair for many, however, some agents might think twice about giving loan originators (who would rather buy their leads than make a face-to-face sales call to to the agent) such open access to their client base. However, most agents never thought about the trade-off. They were so enamored with the free tools, they became myopic concerning the overall benefit.

Many of the more recently created free tools for real estate agents have a grey trade-off. I mean, does anyone outside of Trulia, Zillow, etc... really know what they have in store? I'm not saying one should avoid free tools from these companies, just to keep a critical eye on how the future trade-off will result

--Todd Carpenter - lenderama

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