Mortgage quotes from Zillow, foreclosures from Redfin

A quick update on Zillow's entry earlier this month into the mortgage business, as a go-between linking would-be borrowers to would-be lenders. Zillow marketing guru Spencer Rascoff writes into the blog to report: "Zillow Mortgage Marketplace is off to a great start. There have already been almost 20,000 loan requests submitted by borrowers and over 56,000 loan quotes submitted by lenders. ... Over 4,700 of those loan requests have been in California and over 2,300 in L.A. ... Overall, we're thrilled with the results so far. Borrowers are benefiting from the anonymity with which they can submit loan requests, and lenders are loving the free leads."

Relatedly: Redfin, the online, discount brokerage, relaunches its site Wednesday with what it claims is a first: free listings of foreclosed houses. From Redfin's press release: "Many foreclosed properties can be bought directly from the bank prior to their being listed by a broker in the MLS, but buyers can only see them on most websites if and when the bank hires a broker. Redfin users can see the foreclosed properties as soon as the bank takes possession, usually after an auction fails to attract a buyer willing to pay the amount owed on the mortgage."

More: "The foreclosed properties are an especially valuable asset, because Redfin is now the only major site to offer actionable foreclosure data free of charge. Other sites show foreclosures but then ask the user to pay to see their addresses; often these listings are marketed as foreclosures when in fact they are in pre-foreclosure, where the owner has received a notice of default but is still able to avert foreclosure. Redfin shows the bank-owned (also known as Real Estate Owned or REO) foreclosure properties that are actually for sale, including their full address and bank contact details. Redfin does not show foreclosure properties scheduled to be sold at auction."

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

Comments

[Laker]

The mortgage quotes on zillow are a great tool. I'm sure zillow would benefit from the increased traffic and could also get some fees for leads and ads in the future.
I submitted a request for a quote and supplied with all the requested details, and received couple of quotes already. The numbers are pretty good compared to what is available today. I also contacted and spoke to the guys on the other side and found some good people there. - Very good service.

On redfin, this website/ RE service is excellent. They allow to make general searches, look for specific property listing and provide two HUGE add on benefits that are not available on other websites including MLS access available to regular buyers. Redfin shows the sales history of the house which it great info available on the same page without the need to look at other websites. The 2nd great thing is that they show the Asking Price changes since property was listed. This is great to see how the sellers reduced the prices (down), and coupled with the last sale info, can provide a nice picture of the sellers position.
On top of that, if you use them to place the offer, they kick back about 2/3 of the commission that is huge money that could easily cover closing costs...or simply nice cash to buy a car or something....

One (really honest) Realtor told me, that pricing is declining at such a fast pace that some might find it surprising. She told me that unlike 20 years ago, when information was only available to RE agents, today every joe sixpack can search the internet for sites like redfin, zillow, propertyshark, etc and find all the info right there.
She basically is saying that today we the buyers know so much that any correction in pricing would occur much faster than it used to be before.
So peter, you might consider posting an entry on this idea that 20 years ago, buyers were really been in the mercy of their Realtor, today this is not anymore...
So when the buyers see prices decline at such pace, they simply wait...for a bottom....and guess what is happening as a result...OVERCORRECTION

[lefty]

guys watch out, loan people will increase your rate at the last minute with a vague comment like 'best we can do...', they sound so innocent lol ! even to a guy who checked rates at bankrate.com they added 1/4%! anyway back to the main subject: if you want a good price in a nice location in wonderful metro L.A., do it now!! as they say in mexico, "ahorita!" and buena suerte :)

[Winfield J. Abbe]

The Associated Press article this morninghttp://www.usatoday.com/money/
economy/2008-04-30-fed-rates_N.htm reports that Mr. B. and his dictator cronies on the Federal Reserve Board are going to lower interest rates again today. In other words they are going to misuse their dictatorial powers to again shaft many retired citizens with fixed rate certificates of deposit in favor of their friends and cronies at the New York Stock Exchange who wave and clap like children at the opening as they gleefully receive favored treatment by this little HItler of the U.S. financial system who uses a sort of reverse Robinhood philosophy to screw the millions of responsible senior citizens of Amerikca for the selfish benefit the New York Stock Exchange Cesspool. Please, Mr. B. and your reprehensible friends and cronies, follow the lead of your predecessors in 1929 and jump off the Empire State Building. At least you won't be able to corruptly control the laws of physics as you corruptly violate the free enterprise system and manipulate the laws of supply and demand. "Have a good day" you low down scoundrels and crooks in New York!

[Brad Neal]

Laker, very interesting. It makes sense that this increased awareness among the computer savvy populace would result in an enhanced correction rate. Peter, let's spend more time on this.

[Feizhigao]

I agree with Laker- I'm seeing overcorrection. In Eastvale, west of Norco, a beautiful new development set on the Santa Ana river park, away from freeways, stocked with good schools and parks, convenient to all the best of Chino Hills, Corona, Riverside, and Ontario/Rancho, homes are selling for LESS THAN $100 PER SQUARE FOOT!!!!! I live in North Carolina, and homes aren't even that cheap out here in the woods. You can't even build a house for some of the sales prices on these foreclosures in Eastvale. So get em' while they are cheap, because once the huge supply is eaten up, prices will stabilize and go back up.

[peteviles]

Laker observes, "the buyers know so much that any correction in pricing would occur much faster than it used to be before..."

Thanks, Laker. Excellent point. I agree -- in theory, the explosion of information available to consumers could speed "price discovery" and make the entire correction happen faster. I'll try to work this thought into a bigger post as you suggest.

[Jet]

Just what I thought about zillow...

Why? Because it seems that their zestimate is also wayyyy overpriced and I notice that the same house that they are selling has been there for more than a few months and then all of a sudden it starts again from day 1.

This will not help the RE industry to go to bottom. The bottom of the RE industry will be longer. This is only a business for them to profit and people will still suffer.

[Gene J]

Too bad Redfin only shows the coasts. How about us people in flyover states?

[Karl]

Overcorrection? Surely you jest....the state (not the nation) is in a recession. Still a ways to go.

[left of lefty]

hi laker,

the information availability can also work in the other direction. with everyone having access to historical data and trends, people will 'anticipate' the bottom and start buying at, say, 10% above or 3 months before the bottom, and as a result we'll never hit the 'natural' bottom.

also, any 'joe sixpack' who bought a real estate investing course on late night tv will be able to actually do something on their own. take, for example, the reo auctions in the last few months. all one needs is a $5k cashier's check to become an 'investor.' i'm surprised at how much people actually bid to, or even above, market prices at those auctions.

for sure realtors will have to change, as will mortgage brokers and other industry professionals. but, at the end of the day, i don't think this 'information explosion' will do much to affect the market. the majority of people have neither the skill nor the desire to create complex spreadsheet models to predict the market on their own. they'll still rely on the media to report the numbers and tell them where the market is headed, as they've always done. besides, most people buy and sell homes because of life events -- marriage, divorce, birth, death, and job changes. people do not buy because the market is at a bottom, or sell because it's at a top. real estate transactions are a lot more complex than, say, buying and selling stocks.

the stock market is a good example. a decade ago the internet liberalized the retail stock trade. people are as perplexed about that market today as they were twenty years ago.

overall, i think real estate data sites are good for consumers. the more information, the better. at least people can make informed choices, good or bad, on their own. these sites will affect the real estate commission structure, like what etrade has done for stock brokerages. but they will affect real estate prices about as much as yahoo finance affects stock prices.

[xtine]

i love redfin. What a great tool. Anyone who wants to check out the REOs in their 'hood should give it a look.

[David G from Zillow.com]

Hi, it's David from Zillow,

@lefty - if you ever have that low-ball experience with a lender on Zillow please consider using the review system to give them a poor rating so as to warn any other borrowers that they might quote. Thanks.

@Laker - that's great news. Thanks for sharing your experience. Academically, I like your correction theory but unfortunately I don't think it factors in the phenomenal glut of home inventory and the fact that sub-prime driven demand ain't coming back. We'll see.

[Laker]

David G from Zillow,
"....Academically, I like your correction theory but unfortunately I don't think it factors in the phenomenal glut of home inventory and the fact that sub-prime driven demand ain't coming back..."
So, what are you saying?? the prices will get down to 1995 levels?
Just to clarify myself, I'm was not saying that today's prices are over correction. I was saying that after we reach the bottom, it will be overcorrection. Based on current shape of the CS index for LA, it is really scary (acceleration of declines) and seems like early 2009 for a bottom. Without referring to the CS index, i think the bottom will be 2010-2011 and will stay FLAT for couple of good 3-5 years.

[Rob]

Re Redfin's kickback to the buyer of 2/3 of the selling commission. Many listing agents require the selling agent be at all showings, inspections, etc., or the selling commission is reduced to 1% instead of 3%. And Redfin agents don't show houses or go on inspections, making the listing agent do what is normally the selling agent's job. So, on a $500,000 sale, a Buyer expecting a $10,000 kickback (2/3 of $15,000, or 2/3 of 3% of $500,000) will wind up with 2/3 of $5,000, or $3,300.

[D]

Hmmm - I'm confused. In Jan and Feb alone in the SFV there were over 1,000 foreclosures yet when I pull up foreclosures for the SFV on redfin's map there's 8. Sumping vewy wong...

[jb]

as harsh as Winfield J. Abbe sounds, I am 100% in agreement. Ben is whore to wall street/banker/builders. The high cost of gas and food is simply due to Ben rescuing a bunch of idiot bankers who damn well should have known better.

What do we have to do to get heard?
Our gov has foresaken us - more fat bonuses for the bankers - yipeeeeee