Amid signs that the housing market is cooling, one controversial element of the pre-financial crisis era is staging a comeback: House flipping.
The resurgence in flipping homes — where buyers purchase a home, perform necessary repairs and resell it within months, hopefully at a tidy profit — comes as the real estate market is showing signs of cooling.
Still, housing companies like Zillow are moving to help buyers navigate what’s usually a tough process. With its new initiative, Zillow Offers, the company aims to “take the stress” out of selling a house quickly.
“We’ll sell the house for you, so if you don’t want to go through that process, you can very quickly get an offer,” Zillow Offers program president Jeremy Wacksman told YFi PM.
By answering a few questions and snapping a few pictures, eligible home-sellers will receive an offer from the company within a few days.
“Zillow Offers is really about helping people sell their house, because ...selling is really hard,” Wacksman said. “The stress of going through the process, the uncertainty of what you’re going to get at the end of it, and most sellers are trying to time the sale of their current house with going and buying their next house.”
Zillow will offer a service fee that amounts to 7% of the purchase price on average, but could differ depending on factors such as repairs. The seller then chooses the date within a 90-day period.
Zillow Offers, which launched a little more than a year ago and is now live in nearly a dozen markets, will resell the home soon after.
“We’re paying market value for each house. We’re trying to estimate what it’s going to cost you to sell, and then that’s the fee we charge so that we take on the work of selling,” Wacksman said.
Of course, some housing markets are better than others.
According to Wacksman, Phoenix is the ideal market for house-flipping, with relatively inexpensive houses and one of the fastest growing metro areas.
“Markets like Phoenix are great places to start, because as you mentioned training the technology to get to really accurate offers quickly, is the best way to provide the strongest offer to a home seller,” Wacksman told Yahoo Finance.
Zillow aims to buy 5,000 homes a month through Zillow Offers, and generate an annual revenue of $20 billion.
“Ultimately, we expect this service to be available everywhere,” says Wacksman.
McKenzie DeGroot is a producer at Yahoo Finance. Follow her on Twitter: @degrootmckenzie