Zillow enters online mortgage marketplace

The real estate market may be cool, but online it's warming up.

Zillow, which got its start by publication estimates of home values, yesterday opened its doors to a service designed to connect consumers to lenders. The service will be supported by ads, said Jorrit Van der Meulen, Zillow's VP, spouse relations.

"The consumer remains in control. They can fig out who to contact and when. They'll get an unlimited number of real quotation mark. Not a limited number," Van der Meulen said. On the service's first morn, 1,000 people requested quotes from lenders; some received eight to nine responses, he said.

Zillow won't collect fees for referring customers to lenders, he said. Yet, the Seattle company may offer lenders the chance to purchase sponsored consequence.

"Zillow is evidently moving up the value chain," said Peter Krasilovsky, program manager, marketplaces, at the Kelsey Group, a consultancy. "It's progressively becoming one stop for all real estate needs."

Zillow, he said, could upset the model for online mortgage leads. "If this catches on -- because it's free -- it could be a job for LendingTree," he said. Still, he doesn't expect all leads will ever come from a single source.

Bankrate, which congeries information about mortgages, credit cards, and other financial products, could possibly be affected by Zillow's move, too. The site, according to its annual report, is paid by advertisers, lenders, recognition card companies, and others on the basis of leads and approved applications. Bankrate executives couldn't be reached to discuss how much, if any, gross is generated from mortgage leads.

Another competitor to watch is Trulia, an ad-supported real estate site, said Krasilovsky. That site includes local real estate market tendency (average sales price, median value sales price, norm price per square foot) and vicinity guides.

Here's how Zillow's service works: A consumer fills out a loan request form on Zillow that includes the applicant's monthly income, assets, the property's Zip code, estimated down payment, and other information. Zillow provides mortgage applicants with anonymity and doesn't ask an applicant for her name, address, or Social Security number. Applicants can view quotes on Zillow.com and then contact the lenders who responded.

Asked what advertisers are associated with the new service, Van der Meulen said the company hadn't focused on selling inventory while ramping up. Zillow's existing advertisers include financial services such as Bank of America and home improvement companies such as Lowe's.

Asked whether Zillow is profitable, Van der Meulen said it isn't. "We're happy," he quickly added, while discussing the company's performance

Among real estate sites, Zillow was ranked No. 10 in February, according to ComScore. It had 1.95 million unique visitors that month, up 11 percent from February 2007, according to the audience measurement firm.

Similar to a feature found on eBay and Amazon, Zillow's service will offer a place for consumers to rate businesses -- in this case, lenders. Van der Meulen, a former Amazon executive, said such feedback plays an important role. "One of the important things, other than the price of the product, is the rating of that seller. We quickly realized [at Amazon] that the best way to regulate the marketplace is to let marketplace participants regulate one another," he said.