Editor’s note: Marketing experts expect a continuing migration of real estate advertising dollars online, so it’s no surprise that a growing list of companies are seeking to capitalize on the online marketing trend. Some companies are focused around a single Web site, while others are approaching the industry from many fronts and with many sites to draw both real estate professionals and consumers. In this three-part special report, Inman News analyzes three large companies that each have multiple real estate holdings and Web sites. (Read Part 1, “Dominion Enterprises on the rise.”)
Building a real estate Web site is easy. Generating traffic is hard.
Without a vast storehouse of listings or a revolutionary application that generates the kind of buzz that made Zillow a household name, it’s easy to get lost in the crowd.
Other strategies for success include buying established sites, or building a family of sites that drive traffic to each other.
Acquiring other sites and building on their synergies to create new ones is a strategy employed at Internet Brands Inc., the company that launched in 1998 as CarsDirect.com.
Having carved out a space for itself online in automobiles and travel, the company — which renamed itself Internet Brands in 2005 — has been using the same model to branch out into real estate.
Internet Brands’ home and real estate division includes sites like RealEstateABC.com, LoanApp.com, Loan.com, MortgageFAQ.com, BestRate.com and DoItYourself.com.
RealEstateABC.com, which has been around since 1998, was acquired by Internet Brands in September 2005. It offers a Zillow-like home-valuation tool, a Realtor directory, and articles and other tools for consumers.
Although RealEstateABC rolled out its valuation application in March 2006, Expedia.com founder Rich Barton stole some of the site’s thunder by unveiling Zillow.com in beta test mode a month earlier.
RealEstateABC.com’s valuation tool, which claims access to data on 60 million properties, retains a prominent place on the site’s home page. But the company said the site’s primary source of revenue would continue to be its Realtor directory, which Internet Brands Chief Executive Officer Robert M. Brisco called “one of the strongest … on the Internet” when the valuation tool was unveiled.
Real estate agents who subscribe to RealEstateABC.com supply links to listings and the agent information on the site. Inclusion in the directory is free with a reciprocal link, although a $25 annual membership fee is required for perks like links to agents’ listings pages, listing in the home-search directory, and higher ranking in the results than nonpaying, “guest” members.
For $149 a year, RealEstateABC.com also offers Realtors, lenders and title companies a newsletter and other Web site content. The company says its “how to” guides appear on more than 30,000 real estate sites, and claims RealEstateABC.com “is one of the most-linked-to real estate sites on the Web.”
On a recent visit to the mortgage lending section of RealEstateABC.com, a banner ad invited browsers to visit LoanApp.com, with the promise, “Apply once, get four free mortgage quotes.”
A lead-generation site for mortgage lenders, LoanApp.com is another relatively recent addition to the Internet Brands stable, which it acquired from Myers Internet in 2005.
While focused on mortgage lending, LoanApp.com’s home page features links to many other sites in the Internet Brands lineup, including CarsDirect.com, Loan.com, Mortgage-Net.com, Vamoose.com, VacationHomes.com, and DoItYourself.com.
The site boasts it’s been generating leads for mortgage lenders since 1994, with a claimed rate of 30,000 a month. The base price for purchase leads is $10 to $20, depending on the state, although there are additional charges for applying filters like loan-to-value ratio.
Leads for more lucrative home equity and refinance loans are pricier, starting at $25 to $45, and the company also offers live transfers for $70 to $80. Exclusive leads cost twice as much.
Loan.com debuts
More recently, Los Angeles-based Internet Brands has expanded its presence in mortgage lending with the launch of Loan.com, a site with the avowed mission of providing a “trusted marketplace” where consumers can find ethical lenders.
“The truth about lending is here,” Loan.com promises. But Loan.com also directs traffic to its sister lead-generation site, LoanApp.com — where no such promises are made.
With delinquencies and foreclosures in subprime mortgage loans on the rise — and many consumer groups and politicians questioning the ethics of the lenders who made them — Loan.com’s arrival on the scene in January appeared well timed.
In a press release announcing the launch of the site, Internet Brands Chief Executive Officer Bob Brisco said consumers and ethical lenders were “frustrated by the games being played in the mortgage lending marketplace. Unscrupulous lenders lure consumers with teaser rates, charge hidden fees, and lie about closing dates. Consumers are wary and ethical lenders have difficulty competing against these tricks.”
Loan.com, Brisco said, would “empower consumers by providing them with the information and tools they need to make smart borrowing decisions.”
Like other mortgage lending sites, Loan.com offers payment calculators and loan comparison tools, plus a library of articles about the lending process. The most unusual — and heavily promoted — aspect of the site is an “Ethical Lender Directory” made up of companies that have agreed to abide by Loan.com’s “Borrower’s Bill of Rights.”
Lenders who sign the Borrower’s Bill of Rights agree to offer competitive rate quotes without resorting to bait-and-switch tactics. They promise to charge fair fees, provide upfront disclosure of lending fees, and stick to promised closing dates. The Bill of Rights says lenders will lock rates when asked, “provide exceptional customer service,” and act as a customer’s advocate with loan underwriters.
The site’s low-key look fits in with the premise that it exists to help consumers, not rip them off. There are no flashy banner ads or other obvious advertisements. Lenders are charged on a per-click basis when they get traffic from hyperlinks embedded in lists generated by loan queries.
But some consumers who go to Loan.com because they want to deal with lenders who have agreed to abide by the “Borrower’s Bill of Rights” may instead find they are directed to another lender who has not. There are several ways this can happen.
A loan query on Loan.com will return links to not only the “ethical lenders” who have agreed to abide by the Bill of Rights, but another — and often longer — list of “more lenders” who have not.
A recent request for a list of lenders offering a $400,000 3/1 adjustable-rate mortgage in California charging up to one point, for example, generated eight results from seven “ethical lenders” and about 30 results from other lenders — many offering lower interest rates.
Loan.com notifies users that the second list of “more lenders” is “powered by” Informa Research Services Inc. — a market research firm — but the lists look similar, and some users may not realize they are different. Mousing over the words “more lenders” triggers a small disclaimer, advising users to “Be aware that these lenders may not have attested to the Borrower’s Bill of Rights like the Ethical Lenders above.”
One of the lenders that turned up as an “ethical lender” in the Loan.com search results for an ARM loan in California, Total Mortgage Services LLC, last year agreed to pay Connecticut regulators $9,000 for failing to license two of its offices in the state. Consumers have lodged 12 complaints against the company in Connecticut in the last three years, but it has maintained a “satisfactory” rating from the state’s Better Business Bureau.
Erin Peacock, a spokeswoman for Internet Brands, said the company researches each company labeled as an “ethical lender” to ensure they are in good standing with the Better Business Bureau, operate a valid Web site, and have valid broker’s license. She said three companies have been removed from the list of ethical lenders since the site was launched.
Loan.com queries in most states produced only a handful of “ethical lenders,” even with large national lenders like E-Loan and Quicken showing up in most results.
“Over time, we expect the majority of lenders on the site to be certified, but we will always offer customers the broadest selection possible to meet their needs,” Peacock said. “If a customer can’t find the loan they’re looking for from one of our certified ethical lenders, we want to offer them additional options so that they don’t have to start their search all over again.”
Loan.com also directs users to LoanApp.com and to lenders who haven’t signed the “Borrower’s Bill of Rights” in other ways.
Articles for borrowers, such as “How do I avoid getting taken at the closing?” and “How do I choose an ethical subprime lender?” are accompanied by links that offer users the option to “Get free quotes from local mortgage brokers.” Clicking on the link takes users to a form at LoanApp.com.
Loan.com invites users who “can’t find what you’re looking for?” to call (800) 975-6759 — without noting on the site that it’s the toll-free number for LoanApp.com.
“When a customer calls the 800 number, we clarify that the request will go to LoanApp.com during the introduction script,” Peacock said.
Marketing ploy?
It’s no secret that the top real estate sites on the Web, whether they share a common parent or build alliances through partnerships or advertising, rely on each other for traffic.
According to Hitwise, about 30 percent of visitors to real estate Web sites go to another real estate site on the Internet, and even rivals like Realtor.com and Zillow generate significant traffic for each other (see story).
Click stream data from Hitwise indicates Loan.com is not among the top 10 referrers of traffic to LoanApp.com. The lead-generation site’s top sources of traffic in May included Google, Mortgage-Calculators.org, LoanWeb.com, Wikipedia and Mortgage-Net.com.
Top destinations of Web surfers who left Loan.com for another site included FreeCreditReport.com, MTV Online, the Federal Trade Commission, and FindAdvanceApp.com, a payday lending site.
But by using Loan.com to push traffic to LoanApp.com and other lead-generation sites, Internet Brands may have created an opening for those who may be inclined to doubt the company’s sincerity in promising consumers a “trusted marketplace.”
In a recent Inman News guest perspective, Mike Dodge, the Internet Brands executive in charge of the company’s home and real estate division, fretted that skeptics might dismiss Loan.com’s Bill of Rights as a “marketing ploy.” Dodge — who before moving to Internet Brands in December was a top executive at WMC Mortgage, General Electric’s subprime lending unit — argued that a “solid, well-thought-out customer Bill of Rights can raise the bar for entire industries by establishing a fair marketplace.”
Through a publicist, Internet Brands executives declined to discuss how the company’s sites cross promote or refer traffic to each other, saying such information is proprietary. Peacock, the company’s publicist, provided written answers to questions about the practice of referring visitors to Loan.com to other sites, or to lenders who have not agreed to abide by the “Borrower’s Bill of Rights.”
If a Loan.com customer can’t find what they are looking for, Internet Brands is comfortable referring them to the company’s other sites, Peacock said, because “we know that our business practices are sound across the board. For example, a subprime borrower might find it difficult to find rates on Loan.com. However, there’s a good chance they can get rate quotes through our LoanApp.com site.”
Loan.com’s terms of use informs visitors to the site that, “When you submit a request to Loan.com and we forward that request to Loanapp.com, you become a customer of Loanapp.com. Loanapp.com will assume responsibility to follow-up on your request.”
The same goes for requests for car loans or student loans, the terms explain: “Any transaction facilitated through a partner will be governed by that partner’s separate terms of use. Loan.com expressly disclaims any liability or responsibility for the success of your transaction.”
But the terms of use are “required legal language,” Peacock said, which “probably makes things sound more complicated (than) they really are.”
Loan.com doesn’t currently have a “request a quote” function enabling users to submit requests directly through Loan.com, she said.
Linking Loan.com’s offer to “Get free quotes from local mortgage brokers,” to a form at LoanApp.com, is “designed to make it clear (users) are dealing with our LoanApp site,” Peacock said.
“If we were to integrate the two sites, we would denote it as such to the consumer as well as explaining it in the terms of use,” she said. “Our goal is transparency to the consumer with regard to what’s happening with their information.”
Peacock said the links on Loan.com that take users to LoanApp.com are considered advertising, “even though we operate both of the sites. We do this to make it clear that LoanApp.com is a different site with access to different lenders than those on Loan.com”
Although Loan.com also provides direct links to lenders who have not agreed to the “Borrower’s Bill of Rights,” the site was designed “to minimize confusion as to which lenders have been certified by Loan.com and which still have yet to receive this designation,” Peacock said.
The “more lenders” and “ethical lenders” lists “are clearly separated and labeled,” she said, and the “more lenders” list doesn’t include ratings “stars” awarded to ethical lenders.
Lenders in the “more lenders” list can’t be used in Loan.com’s loan comparator tool, “which is a popular resource our customers use to compare loans,” she said.
“We highlight the lenders who have qualified as ethical lenders, and we are strongly committed to maintaining the integrity of our ethical lender program,” Peacock concluded. “Since not all customers qualify for these loans, we still want to offer them other choices. We’re trying to educate — not control or restrict — the consumer.”
***
Send tips or a Letter to the Editor to matt@sandbox.inman.com, or call (510) 658-9252, ext. 150.
