First they offered “name your price” airline tickets. Then hotel rooms. Now, home mortgages.
This week, Priceline.com is back in the news, offering home buyers a chance to log-on and save money, by naming their own interest rate and mortgage terms.
The popularity of Priceline’s “name your price” approach comes as no surprise. In today’s networked world of e-commerce, consumers rely on the Internet not just for information, but also for competitive pricing and the convenience of online shopping. The people behind Priceline.com certainly recognized the opportunity and have been taking it all the way to the bank.
Home Financing: The Next E-Frontier
This week’s announcement represents Priceline.com’s first entry into name-your-price financial services. In addition, the company has already announced plans to expand from home mortgages into home equity loans and home refinancing in the weeks ahead.
Rick Braddock, chairman and CEO of Priceline.com and former president of Citicorp, explains the benefits for consumers and lenders. “Priceline.com’s Home Financing service takes one of the more confusing and sometimes frightening experiences for new home buyers and translates it into an easy, straightforward, money-saving process. While homeowners get to name their own interest rate and terms, lenders benefit through lower pre-qualification sales costs.”
How It Works
Consumers who have a house picked out can name the amount and terms they need. Or, they can name their desired amount and terms for a pre-qualified mortgage and pick out the house later.
The new service is made possible through a partnership with LendingTree Inc., an online loan originator and licensed mortgage broker, based in Charlotte, North Carolina. LendingTree’s service connects a consumer’s online loan qualification form to a network of national and regional lending institutions that compete for the business. Consumers can expect to receive a response to their request within two business days.
To help launch the new Home Financing service, Priceline.com is leveraging its other e-commerce connections. For a limited time, customers who make a reasonable offer for a home mortgage will receive a voucher of up to $250 (US$) for a one-night stay in any of the hotels covered by the Priceline.com hotel service.
The Home Financing service is the fourth name-your-own-price service from Priceline.com. In April 1998, priceline.com launched a service where consumers name their own price for leisure airline tickets. Priceline.com also has a service where consumers name their own price for hotel rooms in 220 U.S. cities. A third, regional Priceline service lets consumers in the New York metro area name their cash price for a new car or truck.
Priceline.com’s patented e-commerce system was invented by Walker Digital, an intellectual property laboratory in Stamford, Connecticut where priceline.com’s founder Jay Walker serves as chairman.