3 Ideas That Could Fix Major Flaws in the Home Loans Process

As Racquel Russell, Zillow VP of Partner Strategy, puts it: “Customers want everything to fall into place.”

Yet when it comes to home loans, that doesn’t always happen. Buyers have to navigate a complex system, often on rushed deadlines, while dealing with a blur of paperwork. The status quo could use some renovations.

At the 2022 Zillow Unlock conference, Russell spoke with Jason Mitchell, President of the Jason Mitchell Group, about key flaws hurting the home loans process, before outlining realistic steps that could improve it for everyone involved.

1. Set up agents and loan officers to act as a team

One straightforward way to reduce buyer stress is for the agent and loan officer to work in lockstep. Timely, proactive communication goes a long way toward building trust.

Developing that relationship helps agents, too, so they never feel out of the loop on a client’s loan process. Agents revealed that the success of a loan closing often gets placed on the individual loan officer rather than the institution they work, according to internal Zillow research.

Zillow launched Zillow Home Loans (ZHL) to improve those lines of communication. “You don’t have to worry about talking to 10 different loan officers throughout one loan process,” Russell says. “You’ll have one point of contact for each transaction.”

Buyers using Zillow Home Loans close more than 10 days faster than the national average*. A big reason why is the unity between the agent and the loan officer, who will be there for clients every step of the way.

“That trust and confidence the consumer gets when they know they’re in the right place, it just leads to the client being able to seamlessly go through the process without worry,” Mitchell says.

2. Let tech remove early-stage barriers to entry

Technology has the power to solve any problem, but it can’t solve every problem. Automation works best in moderation, helping take care of repetitive labor.

“It’s just good business that we create a place that caters to all the ways a customer starts their real estate journey,” Russell says. But it’s hard to get to that place when too much manual work piles up.

In real estate, that tends to consist of scheduling and paperwork. For instance, since many people refuse to pick up the phone these days, a virtual scheduling platform for home tours has appeal. On the lending side, tech can simplify and speed up pre-qualifications and pre-approvals.

We know that 41% of homebuyers get pre-approved before selecting an agent, so Zillow can make the selection process more seamless by connecting both parties.

Then agents and clients can focus their energy on the most important task: finding the best home. This way, the transaction is still grounded in human interaction. We talk about ZHL’s loan officers as real people who give real answers. That’s still how deals get done.

3. Provide consistent feedback to build healthy partnerships

Mitchell used to be skeptical of collaborating with multiple lenders. Today, he regularly works with six big partner lenders, including Zillow Home Loans.

What changed his mind? The power of feedback.

Partnerships offered flexibility, so if one lender didn’t have loan options that worked for a particular buyer, Mitchell immediately knew of another lender that did. Inconsistency remains one of real estate’s biggest challenges. Sell five houses one month; sell zero the next. When a partnership exists between a tech company and an agency or brokerage, being able to give and receive feedback leads to greater consistency.

With ZHL, in particular, Mitchell appreciated that Zillow didn’t “step on the gas right away.” Feedback was used to smooth out protocols of when and how loan officers would interact with agents and buyers. While Mitchell was initially hesitant to work with Zillow Home Loans, the open dialogue convinced him they’d be a worthwhile partner.

“Being a great partner means you buy into the entire partnership. It’s not leading with your hand out,” he says. “It’s always about what can I do for you first.”

Interested to learn more? Here’s a helpful overview of ZHL you can share with clients.

*Zillow Home Loans average closing time for purchase transactions was 16 days faster than the industry average from July 2022-September 2022, according to “Insights” by Ice Mortgage Technology