I always found it a lot of fun visiting Zillow.com and looking up my house. I type in my address and a satellite photo appears of my property bunched in with my neighbors’ homes — along with a price box superimposed on the roofs. Also, another bigger box pops up with pertinent information: price estimate, monthly payment, square feet, year built, etc.

What could be more fun than this, other than seeing a higher price on your home than the one you might be viewing right at that moment?

As great as Zillow is for getting a price estimate of your home, I could never figure out the Web site’s game plan, i.e., how it created revenue. Because the Web site attracted a lot of eyes — almost everyone you know probably has peeked at Zillow at one time or another over the past couple of years — it garners a good deal of advertising.

That’s certainly a good thing for the owners of Zillow, but, as a consumer, once you found your house and read the basic data, you moved on. So as a utilitarian site, I always felt the value was negligible.

Then one day I was on the site and saw a box for a subject that interested me: mortgages. After maneuvering around Zillow’s mortgage pages a bit, I realized this was one cool way to find a home loan.

After you submit information, numerous lenders make an offer of a mortgage, and Zillow gives the consumer a way to slice and dice the offers so a potential borrower can judge one mortgage offer against the other to see which loan is more appropriate and at what price. Zillow wants you to be a comparative mortgage shopper.

Zillow Mortgage Marketplace was introduced on Zillow.com in April 2008 and ran for many months in a beta phase. Over the past year, Zillow has added new features; the most recent one introduced in third-quarter 2009 was "True Cost," a comparison feature within Marketplace that allows borrowers to shop anonymously across multiple loan programs, compare custom quotes and find the most affordable home loan.

The True Cost feature calculates up front how much a borrower will pay in interest and fees over the time period they intend to live in the home. Borrowers can then compare the "true cost" of the loans across all quotes received from lenders.

I checked in with Mary Miller, director of Zillow Mortgage Marketplace, to see what was going on. My first question was this: A lot of people come to Zillow to get a price estimate of their home, but would they also come to find a mortgage? After all, don’t homebuyers just get a mortgage from whomever their real estate agent recommends?

I hate to admit this in my column, but that’s all I’ve ever done.

"People come to Zillow for a variety of reasons," Miller answered. "Most are in the market for buying and selling homes, but another portion of our market is existing homeowners. Mortgages are tied to both those groups. If you are going to buy a home, chances are you are going to need a mortgage to finance that home unless you are extremely wealthy."

Fair enough, but let’s try it again. Are consumers coming to Zillow to look for a home loan? The answer surprised me. …CONTINUED

According to Miller, on average about 50,000 loan requests per month are submitted by borrowers via the Mortgage Marketplace landing page, which features a running count of loan requests — the last time I was on the page, the number was over 623,000.

"Lenders have written more than 10 million quotes against loans requested. The borrowers are getting a lot of choices," says Miller.

"Choice" seems to be a big concept with Zillow’s mortgage tool, which is a little odd because most people are like me: They are too lazy to shop around for a mortgage. Homebuyers usually get just one quote and go with that because shopping for a mortgage is time consuming and, frankly, just not a lot of fun.

"We came up with Zillow Mortgage Marketplace because we wanted to provide an easier way for consumers to compare and know they would be getting the best quote possible," says Miller. "Consumers could not only look at rates, but at fees, and learn about the different lenders so they could make a more educated choice."

That begged the question: The Mortgage Marketplace is designed to be helpful to consumers, but why would mortgage brokers enter this playground? I called Kathy Whitman, president of Whitman Metropolitan Inc. in Roseville, Calif., to find out, as her company decided to sign on with Zillow early in the Mortgage Marketplace development process.

Is it working out for you, I asked? Whitman couldn’t get her answer out fast enough. "Over the past year we’ve done in excess of $100 million in volume," she said. "And that includes ‘second generation’ where one Zillow customer referred another to Metropolitan. It’s not only been fantastic for us, but it is now one of our main sources of generating customers."

One of the keys to Zillow’s success with its Mortgage Marketplace is the anonymity factor. A customer can submit a loan request form with just the pertinent information to get a customized quote in return. The lenders don’t get any personally identifying information, such as name, phone number, Social Security number, etc., unless the user chooses to reach out and share it with them.

"From the customers’ perspective, the anonymity is important," says Whitman. "They can research their loan without feeling they are going to be bombarded by someone on a daily basis. When they get their loan request from us, they give us a little or as much information about their personal contacts as they want. That’s the big draw."

It’s all something to remember when you find your next dream home — that the time has come to comparatively shop for that new mortgage.

Steve Bergsman is a freelance writer in Arizona and author of several books, including "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade."


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