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December 1, 2008
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An Industry Analyst Looks at Online Loans

Gomez Advisors is building an online reputation with consumers and service providers by creating comprehensive surveys and features analysis which compare online competitors in key categories including cost, ease of use, consumer confidence and more. They are available online, free of charge to consumers at the company's Web site, http://www.gomez.com

From online travel agents, to auctions, to mortgage companies, Gomez has profiled many of the largest industries which operate online. They have produced easy-to-navigate results which will help consumers choose service providers and give competitive companies guidance on how to improve their services and products.

The company recently registered on real estate industry radar when it released the results of its Authoritative Guide to Online Mortgage Sites, naming E-Loan and iOwn first and second overall in its comprehensive survey.

Gomez' senior analyst Nick Karris says,"My understanding of industry averages show that of the visitors that come to mortgage broker sites, about 1% actually close a loan."

"This is a problem and an opportunity," explains Karris. "Many consumers shop around, and are still learning how to apply online. The advantages are significant - convenience, selection, and thousands of dollars in potential savings. As a result, industry analysts predict the online mortgage market to grow from $20 billion last year to approximately $180 billion by 2003.

Gomez plans a role in the growth of the online mortgage industry by selling additional in-depth analysis to companies which desire to improve their services. This analysis is not published on the public site.

The primary selling point for these companies is that surveys conducted by Gomez are not one-time events. The results are updated every quarter to deliver the most up-to-the-minute results.

To be included in Gomez' scorecards by industry, companies must be Internet-based. Criteria then varies according to category. For the "Internet Mortgage Scorecard," participating firms had to "initiate the application process online, process the applications through to closing, and originate mortgages in at least 40 states."

The scorecard evaluations use up to 100 or more objective criteria to establish the quality of goods and services.

Among the questions answered the Gomez survey were:

Does the site provide a loan tracker feature to allow borrowers to track status of their loans?

Does the site provide decision support calculators to facilitate important analyses (e.g. rent versus buy, compare different loans).

Does the site provide a detailed and accurate listing of all closing costs?

Gomez then tests the sites to see if they satisfy specific criteria employing data collection methods such as:

  • Thorough, direct examination of the site

  • Performance monitoring of secure and non-secure pages

  • Customer service interaction over the telephone and through the Internet

  • Phone interviews with firms covering functionality and service levels of their Internet offerings

    Customer profile rankings are particularly important, points out Karris. "Not all firms cater to every profile, nor will the overall best firm necessarily be the best choice for a customer's unique buying motivations."

    For its first Internet Mortgage Scorecard, Gomez surveyed over 80 firms. The company believes it is performing a public service for consumers. Without some method of evaluating and ranking sites of interest, consumers may not be aware of what they are missing.

    "If you go to the portals, you get thousands of hits, and the directory services are not always presented objectively," says Karris. "There is no objective, research base for criteria. None of the portals are providing a broad selection of lenders and their respective pricing."

    "There are other sites which are directory listing services, which simply list hundreds of lenders," continues Karris. "If I typed in 30-year fixed, 150,000 loan, and Massachusetts to conduct a loan search, sites like BankRate.com will quote you a rate, but it may not report closing costs. And we know from consumer feedback that price alone is not enough when consumers are evaluating options and making decisions."

    Why is this service of interest to real estate professionals? You can point your customers to the company's results if you want to suggest an online lender, and potentially secure a pre-approval within minutes for your client.

    "Imagine it's Sunday, and your client needs pre-approval to win a bidding war," offers Gomez. "These online lenders allow borrowers to print out a pre-qualification letter at any time as their borrowing needs dictate."

  • Published: November 4, 1999

    Use of this article without permission is a violation of federal copyright laws.




    Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment.

    Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's.

    Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68.


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    In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.

         

    Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans.


    Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR

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    Coverage from WSMV, Nashville - 8-14-2007

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