BOTHELL — Maybe you’ve seen the Obama Refinance Program pop up on your computer. “Ends 2018, take advantage now.”
Or you’ve seen the little green puppet talk about banks going head to head for your business. “When banks compete, you win.”
These are massive ad campaigns by companies that aim to connect potential borrowers with lenders. How those businesses make money is by collecting your contact information and selling that data to lenders. It’s called acquisition marketing.
Clicking on the links leads to a series of increasingly intrusive questions. Fill out those forms and you’ll start getting calls from lenders.
Brian B. Simmons knows. He filled one out.
“I literally got calls for months,” Simmons said. “Three months, people were calling me.”
The CEO of Scotsman Guide, a Bothell real estate trade magazine publisher, isn’t dissing the business model for these companies — LowerMyBills.Com and Lending Tree, respectively.
The companies have grown into billion-dollar ventures by selling leads for as much as $90 apiece. Legally, the companies can sell the information collected five times. He doesn’t think most people read the fine print to understand this.
“I don’t particularly care for that and I don’t think the millennials will care for that — that their information is just being sold,” he said.
Still, connecting people with potential lenders is a good thing; it helps people get money to buy a home or business, refinance a mortgage or consolidate debt.
So Simmons’ company has created Ask A Lender, a website with the same bottom-line goal of connecting borrowers and lenders.
Its key distinction is that it doesn’t ask for, or collect, any personal data from borrowers. Instead, lenders’ information and phone numbers are available for free in lists for potential borrowers to choose to call or not call. Ask A Lender launched in November.
So how does Ask A Lender make a profit? Any lender can post contact information, also for free, on the Ask A Lender site. But lenders who pay to be verified get better visibility. The lenders paying the most are shown at the top of the list.
The other innovation of Ask A Lender: It breaks down different loan types into categories to allow consumers to easily navigate according to their needs.
Want to borrow money to buy a convent? Click on commercial loans, religious properties and choose “convent” as an option. A list of lenders who specialize in convent loans pops up.
This actually helps both the consumer and the lender. Phone conversations about loans take valuable time, and there’s no guarantee that there’s a fit between a lender and a borrower.
For real estate alone, Simmons found 6,000 loan types across the U.S. So go ahead, find the lenders who will put up money for two homes on a single tax parcel, or a commercial loan for a fire temple, a dude ranch or a carnival.
“Who I’m serving up is a direct match to the loan programs,” Simmons said. “If you have a unique program that’s going to help an underserved borrower, you’re going to get free leads off me for the rest of your life. Congratulations. No sweat off me. I’m happy for you and I’m happy for the borrower.”
One of the reasons Simmons feels so comfortable talking about the business model for his new venture is that he already has a deep reach to lenders throughout the U.S.
Scotsman Guide is in the business of connecting mortgage professionals with lenders. The company employs 53 in the Canyon Creek Center Business Park area of Bothell. The company produces two large business-to-business publications that are sent to mortgage professionals around the U.S.
One magazine, with a print circulation of 30,000, is for residential real estate. The other, with a circulation of 20,000, is for commercial real estate. Simmons owns the company with brothers Todd Britton-Simmons, the sales director, and Kevin Britton-Simmons, chief operating officer.
Ask A Lender is the first business-to-consumer venture for Scotsman Guide. Just a couple of months after launch, more than 3,000 lenders across the U.S. had already put in their contact information and their specializations into Ask A Lender.
“It was amazing once we opened this platform we started seeing lenders simply coming and entering the program,” said Rania Efthemes, director of content for Scotsman Guide. “These are successful lenders. They wouldn’t do that unless they see the value and see how we’re filling a gap in the market.”
Now the focus is getting the word out to consumers. The website in its first two months had attracted 40,000 unique visitors and received 190,000 page views.
The company is advertising the Ask A Lender site digitally and doing interviews about the new venture. The company also is producing content for the website. For his existing magazines, Simmons’ staff have already been writing articles aimed at professionals.
“I love reporters,” Simmons said. “I’ve been hiring them for years. A lot of people call themselves writers, but, you probably know it, the foundation you get as a reporter is remarkable.”
Five people including Efthemes have been involved in producing consumer-oriented articles for Ask A Lender. When the site launched, Ask A Lender had 550 articles already loaded, covering such topics as staging and showing your home for a sale, whether you should use a real estate agent and the best approaches for buying an investment property.
Efthemes said those articles are important to give the website credibility. No one buys a house without doing research, she said.
“We want to be there in the initial phases, we want to be there to support people when they are making those decisions even if they don’t do the Lender search to start with,” Efthemes said. “We want to be the resource that people trust. Once we establish this trust, our other product, the Lender search, will sell itself.”
The articles are search-engine optimized, meaning the material will pop up during real-estate-related internet searches.
“Google is so smart now that it recognizes quality content,” she said. “So it’s something that we can do and it’s not on the cheap but it is something we are capable of. We have the staff for it and it’s the strength of this company as a publishing company.”
Simmons has spent $2.5 million and three years of his time getting the website ready. Scotsman Guide’s creative director Dennis Wunsch designed Otto the Owl, the Ask A Lender mascot that appears on the website. The motto for the website is a trademarked phrase, “Borrow Wisely.”
Simmons thinks that this is something that’s too often ignored by borrowers.
“We all focus on the price of the real estate,” Simmons said. “We pay attention to that. We’re looking for property. We’re looking for a good deals. But let me tell you, the the cost of that loan over 30 years is more important and a very small percentage in interest rate can have implications of tens of thousands of dollars.”
Most real estate agents work with a single borrower in a sort of “symbiotic relationship,” Simmons said. That’s not an inherently bad thing. People borrowing money should at least check to see if the rates quoted are competitive.
“Just spending at little bit of time to get a second quote — a least a second quote — keeps that initial offer in check and gives you confidence the offer you got was sound,” Simmons said.
Ask A Lender so far mostly is focused on real estate where the company has the most experience and contacts. Simmons would like to see more lenders that specialize in such things as auto and students loans join the website. That’s something that he hopes will happen over the next year.
Still, he’s happy with the venture so far and the reception it’s received.
“I was able to create technology that is more useful and more powerful than billion-dollar companies,” Simmons said. “We take the mystery out who does what loans and helps the consumer borrow wisely and educate them.”
He thinks that it will compete well against the Lending Trees and LowerMyBills.coms of the world for one very important reason: Word of mouth. People who get their personal information sold by those companies likely will be less than inclined to recommend the services to their friends and families.
He thinks that people will have good experiences with Ask A Lender and tell others about it.
“We’re two months in. We’re obviously not profitable, but I believe in the model,” Simmons said. “If you go down one of these capture forms, I don’t think you’re going to tell your friend to do it. Would you want to tell your friend to do that? I don’t think so.
“I just happen to believe that if you compare my model to their model, my model is better.”