There’s no doubt that Atlanta is a hot real-estate market. Inventory is low and prices are higher than ever—giving sellers the upper hand. So, imagine our surprise when Trulia reported that more than 10% of property sales failed in Atlanta in 2016 – making it the U.S. city with the third-highest rate of failed sales. Sounds like a little more fizzle and a lot less sizzle than we would’ve thought.
So, the Knock team went on a quest to determine what exactly was happening. What kinds of houses fail to sell in this otherwise hot market? With data pulled from the first quarter of 2015 up through 2016, we sliced and diced the info to understand what was shaking out in Metro Atlanta. We wrote an in-depth report (download it here), and uncovered these key findings:
• Sales of trade-up homes and starter homes fail almost at the same rate. Knock found that in 2015 and 2016, a whopping 11.7% of starter-home transactions failed, while 11.6% of trade-up home transactions failed.
• Houses built from 1960 to 1969 experienced the highest rate of failed sales. These houses are likely to have had multiple owners during their lifespan, but they could very well be facing serious structural issues that require a significant amount of money to upgrade. In East Point, for example, 14.4% of home sales failed in 2016. This is an area where 86% of its houses were built before 1970.
• Transactions are most likely to fall through in March. Ah, spring! After the lull of winter, this is when sales activity begins to pick back up. Issues exacerbated by the harsher months will become evident to buyers once they start shopping.
• Failure rates are increasing year-over-year. It’s a sellers’ market, sure, but buyers are savvier than ever. Buyers have widespread access to online research tools, and are doing their homework before the transaction closes. If they deem that a property is not as valuable as a seller says it is, or other factors are askew, they will definitely walk away. #failsale
Less than half of sellers (45%) conduct an inspection before they list their home. When sellers resolve major issues before putting a house on the market, there’s a better chance that the transaction will move forward smoothly. Don’t leave it to chance, buyers WILL have their own inspections done to uncover these issues. You can run but you can’t hide. Successful sellers get out in front of major repairs by having them fixed properly before listing.
Many home sellers hold onto the notion that the best approach is to price high originally and then negotiate the number down to their ideal price. There’s a strong correlation between the time a house spends on the market and initial overpricing. If a property receives zero offers within 30 days of being listed, it is priced too high.
Would you buy a shirt off a website if the product photo was clearly taken with an iPhone, and the shots were uninspiring/unflattering? Probably not! You want to aspire to own that item, and envision yourself wearing it and loving it. Buying a home is no different. This is one of the biggest, emotional purchases a consumer will make in their lifetime, so it’s up to you as the seller (or your professional team) to inspire the buyer to purchase.
Many other life events seem to be contingent on a home sale. Whether it’s starting a new job, moving to be closer to family or transferring your child to a new school – it’s not feasible to leave the sale of your house to chance. To learn how Knock guarantees that homes will sell in 6 weeks or less, read up on our industry changing strategy.