The Science of Flipping - The Zillow Hack To Sell Properties

Episode Date: November 25, 2020

Need a hack to save a little cash on your exit strategies? I got a simple but effective hack in order to maximize your profit on the dispositions side of your rehab!

What's up, everybody? Welcome back to the Science of Flipping podcast. I am your host, Justin. And as always, this podcast is about the systems, tools, tips, tricks, strategies that you can implement right now in your real estate investing business. If you have not yet gone over to thescienceofflipping.com, please feel free to grab any and all free resources over at thescienceofflipping.com, as well as if you want to have a deeper dive with me on a strategy session, feel free to fill out the form. And we will spend 15-20 minutes together about your business, the challenges you're having, and how I potentially could help you and give advice on those. So thescienceofflipping.com, please go over, check it out. With that said,

guys, I want to talk all about how to sell your flip without having to list it on the market and the secret sauce to do so. So you can save some extra money, anywhere from two to three, or maybe even 4% selling your rehab flip. Now, the key here is you also have to understand the market we are in. It is a seller's market. And what Zillow has done so brilliantly over the last two, three years is really become the go-to platform for many of you who have been in the industry. Zillow is a very, very common name. And in fact, in markets like Phoenix and other markets, you have maybe even now seen Zillow as a competitor. They are actually buying homes to flip themselves. They are trying to consider themselves one of the I buyers in the space. And they are in several markets, including Phoenix and others, buying homes.

But if you are a flipper yourself or even a wholesaler about to do their own flip, understand your market first. Start to look around at what properties are listed on Zillow for sell by owner because they now have that feature. That is part of the secret sauce. Zillow has really upped their game and now is offering a sell by owner feature, which is in part one of this strategy that we use when selling a property, especially if you are not a licensed realtor and don't want to list it on the MLS because you don't want to have to pay another one, two, three, or even 4% to the listing realtor. Now, with that said, I want to be clear. You will always want to offer up a selling commission, meaning the realtor that brings the buyer, not your listing agent, if you do decide to go to the MLS. But no matter what,

even on Zillow, there will be a realtor likely involved that will bring a buyer. And you always want to offer up a commission. I would say at very, very, very minimum 2%. Most likely reality is 2.5%. Otherwise you can top it off at 3% if an agent quote unquote sells your property. Now the nice part about Zillow is obviously you're trying to remove all agents and you could potentially save up to five or even 6% commission because you're hoping someone is on Zillow searching for homes to buy and they come across your for sale by owner and you save all of that commission in total. But we have found more often than not, there's some level of commission that needs to be paid because homeowners a lot of times will call their realtor and say, hey, check this home out on Zillow,

even though it's not necessary, even though there doesn't need to be a realtor involved in the transaction, they are still calling a friend or family member who is a licensed realtor. At that point, more often than not, that friend or family member calls us the homeowner, flipping the home, and usually engages with us in a very traditional manner. And hence, you have to pay out two, two and a half, 3% to that realtor. It is what it is. It is the space. You're hoping more for the person who can kind of take their purchase into their own hands. They feel comfortable doing it and actually submit an offer to you. And that's really what you're looking for. Because again, like I said, you'll save four or five, 6% commission

here. And Zillow really is the predominant marketplace for something like this. Now, part two of all of this is understanding if you're listing it on Zillow for the right price. What I would be looking at is you want to look at other homes in the area, call it a half mile out and see what price point they are listing their properties at. Not only that, you want to start looking at the views of each property that are active, right? How many views are they getting? And then how many likes. On Zillow, you actually can see views and then you can see, you know, they have it as little hearts, just like Facebook. You actually can see how many people have saved, I guess is a better, is what they call it. They save that property. And if you see a lot of saves in a certain price point around a very similar

type of property as yours, you know, you're at the right price point, right? And you might want to play around because it is a seller's market and increase it slightly. You might increase it five grand or 10 grand, you know, relative to the property that you are using as an active comp that has a lot of saves. Because again, I have a student of ours that is doing really well. He is doing a flip right now. He just listed, he took my strategy. He's a student of ours. He's taking my strategy, activating it right now. He put his home on the market Saturday, like 11 AM, I think he told me, which is not ideal, but it is what it is. Ideally, you're putting it on the market like Thursday. And he got something like between Saturday and yesterday, which would be Sunday, he got something like 750 views and 28 or 38 likes,

something like that. And that is really important to know that he is priced right. He has that many views, meaning there's that many people looking in that price point, which is really important. And then on top of which, he did a good job remodeling it. He's in the right price point.

So people are saving that. Now you might ask yourself, why are they saving it? Well, maybe they're going out and trying to find a loan approval. Maybe they were viewing it while they were at their kid's soccer game on Saturday or Sunday. And they wanted time to go back

and talk about it with their spouse, et cetera, right? So they saved it. That's good news. That means you're in the right price point. And likely we're gonna be able to move that property. If you are not getting a lot of saves, you are likely outside the price point of the home or the quality of rehab that you may have done. So you need to adjust based around that barometer. Again, if you have a high volume of views real quick, like my student did, then you feel really good. You know, 700 plus views basically between Saturday evening and Sunday, 28 or 38 likes or saves, I guess you should say.

I told him within a week, you should be expecting some level of action here with realtors reaching out. He showed it a couple of times over the weekend. So feel really good. within a week, you should be expecting some level of action here with realtors reaching out. He showed it a couple of times over the weekend. So feel really good. But this is a great strategy for someone who is trying to save a little bit of money, might have pressed the envelope at the price point you bought the flip at. Maybe you paid a little more than you wanted. Well, there's a great way to be able to save money and that is using Zillow. And this is something that not a lot of people know. Not a lot of people know the strategy about looking at the views and then the saves. That is how I know where I want to price point this property. Obviously, if you have PropStream, that is an incredible place for

comparables. I would prefer to use PropStream around comparables. If you don't have PropStream, just go to tsofdata.com, tsofdata.com and get seven days free trial of PropStream. And so if you don't have PropStream to run comparables, Zillow really is, you know, fundamentally just as powerful for this one reason. As you can see, all the comparables that are active for sale by owner, what the price point is, do they have a lot of views? Do they have a lot of saves? And right there, you know where you should be placing your property. So hopefully this helps. Again, if you are looking for PropStream, I think every realtor or not realtor, but every investor really should be using PropStream. It's just great for so many freaking reasons. I, myself, and my entire team

use it daily. Just go to tsofdata.com for PropStream and a seven-day free trial. Otherwise, if you'd like to chat a little bit further about your business and how to grow your business, launch your business, and scale your business, just go to thescienceofflipping.com and let's jump on a call. Hopefully, you find this guy as well. Oh yeah, by the way, if you are looking, I produce as much value as I possibly can around all things real estate investing, business, and entrepreneurship. If you like this podcast, awesome. It'd be a massive favor for me if you guys would actually go out and give it a review. Be honest.

You know, I love five-star reviews, of course, but please give it a review. Also, there is daily videos that I put up on my YouTube channel. So if you are loving this stuff and you have not yet subscribed to my YouTube channel, please do so. Just go to youtube.com forward slash Justin Colby. And you can watch daily videos about again, real estate, investing, business, entrepreneurship. And I hope that helps you guys as well. I'm here for your help. See you guys on the next episode. Peace.