Zillow's "Make Me Move" strategy?

Question

Hi all,

I have just put 2 properties in the LA county area (one SFH, one Multi Family) on the "make me move" section on Zillow. I set the prices quite high to gauge the market for them not thinking there would be much interest. I now have lots of agents contacting me for more information, asking if the properties are under contract, and asking to meet directly. I'm not sure if this means there is actual interest or the agents are just looking for more information. I don't want to spend my time meeting with agents unless there is a buyer, and I don't want any viewings or inspections until we are in escrow as I do not want to disturb the tenants.

What should my strategy be from here? I was thinking:

- Give agents as much accurate financial information on the properties as possible (net income, pro forma rents, how much work needs done, what can be added to increase rent etc..)

- Inform agents I will only proceed with them if they have a buyer ready, with pre-qual letter, if they do then I am willing to have them act on both my end (seller) and the buyers behalf with a lower commision, as they are taking the full commision?

- Once things are heating up, inform the tenants that we are looking to sell so they should prepare to either find another place or have a new landlord in the upcoming months, they are on month to month contracts so there are no long term lease issues however I would like to give them as much time as possible if they do have to move out.

Is this a reasonable strategy? any input is much appreciated thanks!

Kyle J. · Answer

The first thing I'd ask them is do they actually have an interested buyer, or are they just trying to get you to list your property with them?  My guess is the latter.

Steven Bond · Answer

Sounds more like a strategy for an agent to pick up listings.  However, the multifamily market is incredibly tight right now.  I am working with Robert Stepp who I believe is rated the #1 Multifamily specialist for the LA area.  He is selling for another client of mine that is doing a 1031 exchange into my market in Utah for a higher cap-rate.  I would highly recommend calling someone that is truly a legitimate professional that covers that area and ask this question.  "What is the best I should expect with the current NOI, any maintenance needs, location, etc?".  A solid professional will want to earn your trust, not just a listing.  I would anticipate Robert to give you an honest approach as to what is realistic in this market for your area.

All the best!

Tom T. · Answer

my guess is they are looking to get your listing.  The structure you suggest

I am willing to have them act on both my end (seller) and the buyers behalf with a lower commission, as they are taking the full commission?

is called dual agency and I do not know it is legal in California. Usually, an agent has only one persons best interest (Fiduciary responsibility)  at heart... Either the buyer or the seller.  You of course can be a FSBO but if you want agents to bring clients you will need to offer them %.   I would disclose that you have no leases in place and most are month to month which has its own set of issues.

The other way to play it is to go ahead and hire a listing agent to work on your behalf. If they are good, they will add value and reduce your headache.

Good Luck!

Account Closed · Answer

Thanks Steven, i'll be sure to look into those.

I'd say we got lucky rather than made a great investment choice, bought in 2011, initially overpaid, but thanks to appreciation and demand it turned out to be a great deal!

Account Closed · Answer

Thanks for the recommendation I will look Robert up for advice. Currently I have a good idea of the value but since I am not that motivated to sell the properties unless that full asking price offer comes in (which is why I only put it up as "make me move") i'm tempted to only accept to show the house with a prequal letter and proof of funds.

I had alot of agents contact me fore more info, rent rolls, inside condition etc.. and I've answered every question as honestly as possible. Now I'm weighing up whether to give the agents a chance to view the insides to market to their investor list, or tidy up the properties myself and take some pictures which would negate the need for any more visits.

Account Closed · Answer

Thanks I will have to look into the dual agency issue further, my initial point of view was that if there were a bid at my (above market) asking price without listing the property, with basic contingencies in place such as an inspection after opening escrow, there couldn't be that much in the buyers favour for me to worry about as I would be factoring 8-10% selling costs. Since the properties are valued over 1M however every % counts so by shaving off 1-2% this could make a big difference.

Steven Bond · Answer

Good luck!  Sounds like you made a great investment choice in high demand.  One more note....try to establish the full exit strategy before hand.

• Reverse exchange
• Short term vs long-term capital gains consequences
• Traditional 1031 exchange, etc

Take care!

Zillow's "Make Me Move" strategy?

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