Zillow Forgot One Important Thing About Mortgage Lending
Zillow announced it was entering the mortgage business. That came shortly after they announced they were getting into buying and selling houses.
Investors looked at the plan and Zillow stock tanked. Why?
Mortgage lending can be lucrative, but in order to succeed, it needs to be done correctly. You need to invest time and energy into learning how to do it well. You can’t just decide you are going to become a mortgage lender — and it doesn’t seem like many investors think Zillow will do it well.
In fact, the whole home buying experience requires that things be done well by dedicated professionals. The closer an agent or lender is to the transaction, the better it is for the homebuyer and the home seller.
Zillow buying and selling property or doing mortgages is like Slugworth trying to produce Willy Wonka’s Everlasting Gobstopper, if he had been able to steal the secret. It wouldn’t just happen. Sure, he would know what it looked, smelled, and tasted like — but producing one to bring to market would require the heart and soul only Wonka could put into the product.
The home buying experience is best handled by human beings dedicated to the customer experience and close to the transaction. Sure technology is cool, but absent the investment of time and energy by dedicated real estate and mortgage professionals, technology is just cold.
Other news in real estate and mortgage lending
The Fed chose not to increase interest rates last week, but was quick to remind us that one will be coming in September. It is a brief reprieve from the affordability issues some potential homebuyers face as rates and home prices rise.
Not the best of times in real estate, but if you have decided to stick with it — even without the assistance of the Oompa Loompas or Charlie and the Chocolate Factory — there are brighter days ahead.