The Post-COVID shift: What Amazon and Zillow can’t do

The competitive advantage for mortgage and real estate companies

In just a few months’ time, COVID-19 accelerated the digital shift era to forever change the way consumers approach home buying. This tipping point came after several years of rapid technology growth in our industry. In February 2019, we wrote an article predicting this seismic shift, detailing how mortgage lenders could and should prepare to not only survive the shift but thrive in the future digital age. 

The trends we elaborated on two years ago, pre-COVID, are now the standard:

Digital is the new normal and technology is now the price of entry rather than a competitive advantage. Consumers don’t differentiate between digital and offline. They don’t think, “I’m going to fill out a digital mortgage application or I’m going online to do my mortgage application.” To them it’s just “a mortgage application.”

Homebuyers and homeowners use technology and mobile devices for every facet of their everyday lives, and e-commerce is business as usual. Smartphones are just phones and digital wallets have increasingly become our “wallet.” Mortgage lenders and real estate agents who do not provide customers with a digital experience are being left behind. 

The COVID shift

The digital shift era in mortgage began in 2017, but COVID exponentially escalated the speed at which digital applications were introduced and adopted.

COVID killed cash. In a contactless world, everyone is using Apple Pay, Venmo, PayPal and others to make payments easier and safer. Similarly, COVID killed paper and manual processes. 

When we wrote the “Seismic shift” article in 2019, less than 50% of mortgage applications were taken digitally. Today it’s over 70% at big banks, and between 95% to 99% for top producers. 2020 will essentially be looked back upon as a pivotal year, and it won’t stop with mortgage applications. 

As mortgage and real estate professionals, we need to think about how we are meeting consumer expectations, while also taking it a step further to offer additional value beyond the transaction.

A customer-centric, value-driven experience

The digital shift thus far in the mortgage industry has largely been about how lenders can generate time and cost efficiencies by optimizing speed of applications, processing and origination. 

The next phase of the digital shift, however, is less about what it can do for the lender and more about consumer empowerment — putting the control of the relationship into the consumers’ hands.

To compete today, lenders need much more than a POS and Realtor relationships. You need to be the kind of coach and advisor that someone would pay to be there in the same way they would hire an attorney. The key to your future is in your ability to compete on a service experience.

Herein lies a tremendous opportunity for lenders and Realtors to remain competitive in a world run by Amazon — something futurist Steve Brown calls, “What Amazon Can’t Do” (WACD). We like to add Zillow to that and say what Amazon and Zillow can’t do (WAZCD).

Essentially, it means that even though the behemoths outnumber local lenders in funding and marketing spend, what they lack is something homebuyers want and need: advice and a personal relationship. If local lenders are strategic with that competitive advantage, that’s where they can win in their local markets.

Managing the experience beyond the transaction

Most loan officers lose 70% of their past customers because they don’t have the process or tools to manage the relationship forward. In the new digital era, tech and advice come together for maximum value. 

By utilizing automation and digital tools, modern mortgage lenders are freed up to deliver the most value to their customers. As a result, the top priority today for all modern mortgage lenders is not the loan they deliver; it’s their ability to manage the experience beyond the transaction with personalized advice. 

Modern mortgage advisors support consumers with information and tools to help them manage their home equity in a smarter manner, whether it’s payments, debt consolidation, mortgage management or future decision-making around selling, buying and moving up faster. Mortgage lenders have a unique opportunity to fill a void in financial planning by helping consumers manage their home and mortgage as a lifelong asset. 

Tools like Mortgage Coach, Homebot, House Happy and HomeBinder are all growing tremendously. And for the local lender, these post-transaction platforms help lenders proactively manage the customer relationship throughout their entire lives by delivering high-value advice that helps them build wealth with real estate over time vs. just getting a mortgage. 

The future experience

By 2027, the mortgage industry is going to look completely different. Here are just a few of the trends we’re watching over the next few years: 


On the lender side, there will be fewer logins. Right now, you have to log in to Mortgage Coach, Homebot, your LOS and pricing engine all separately. Eventually, for your best-of-breed tech stack — all the technology that runs the mortgage and real estate industry — you’ll have one login. 

MLS reinvented

While currently only a theory, Amazon is well-positioned to reinvent the MLS. Between the unique purchasing behavior data they have on almost every household in America, they could become the ultimate disrupter.

Tech becomes fintech

However, the real threat right now is in the emerging banking-as-a-service. Tech companies can leverage banking as a service and white label it. Or they can overlay it on top of their technology and offer fintech services to their customers. This could become a real disruption in the future. 

Data-driven personalization

Lenders that want to shift toward a customer-centric experience that is competitive over the next decade are collecting and amplifying customer feedback online and internally to drive better outcomes. 

Following the trends is not enough. Lenders must first listen, then follow, the customer.

Your future livelihood is at stake 

There’s never been more at stake for a loan officer or a real estate agent than there is today. There are more loan officers in America who did over 300 loans last year than ever before. There are more loan officers who did over 500 loans last year than ever before. For the first time ever, there were multiple loan officers who did over a billion dollars in mortgages. And that would not have happened without leveraging technology. 

However, that technology is only the entry point. The competitive advantage is in “WAZCD.” If you’re competing on rate or technology alone, you’ll never win. Competing as a coach and trusted advisor is a different story. 

Rene Rodriguez says, “If you want someone to like you, don’t try to be liked. Focus on liking and loving the person you’re talking to.”

At the end of the day, if you’re going to do what Amazon can’t do, you must listen and love the local customer in a way that only you can. Being a modern mortgage lender or real estate agent requires that you leverage technology to become the best advisor. 

Kristin Messerli is the vice president of financial services at Dave Savage is the founder of Mortgage Coach.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the authors of this story:
Kristin Messerli at [email protected]

Dave Savage at [email protected]

To contact the editor responsible for this story:
Sarah Wheeler at [email protected]


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