According to a report from Trulia, 10.4 percent of Atlanta’s property sales failed in 2016, which was the third highest rate of failed sales. Knock.co looked into property transactions over the last two years to come up with reasons behind the high failure rate in the city.
Nationally, Trulia found that starter homes have the highest rate of failed sales. However, in Atlanta, trade-up properties tend to see a significant percentage of failed sales as well.
Knock.co believes that this is due to it being difficult to find homes in the mid-range — instead the majority of homes are either starter homes, like in neighborhoods such as Vine City, or premium homes that are often found in areas like Buckhead. A recent report from Realtor.com also found that Atlanta is the tenth most difficult city to trade up in home.
When looking at the ages of homes, the highest failure rate sits with properties built between 1960 and 1969, with 12.8 percent of those deals falling through. This likely has to do with these homes needing major renovations and upgrades that are expensive and that owners cannot afford to do.
“We’re seeing that many houses built prior to 1970 are in underdeveloped neighborhoods with higher poverty rates,” Sean Black, Knock’s cofounder and CEO, said in a press release. He also said that residents often can’t afford to fix structural issues or make substantial upgrades, which are leading to more failed sales.
The report specifically cites East Point as an example of one such neighborhood. According to Knock, 14.4 percent of home sales failed in the ZIP code 30344 in 2016. In that ZIP code, 86 percent of the homes were built before 1970 and 27.8 percent of the neighborhood’s population lives under the poverty line.
In Kennesaw, the report found that 13.7 percent of homes in that area failed to go through. But of the ones that were sold, one-third were built from 1990 to 1999, which points to there being fewer issues with the homes due to them being relatively new.
In order to make sure that sales don’t fall through, Knock recommends that homeowners and sellers take a few steps up front.
“Invest in a home inspection and address major issues upfront,” Black says. “And while it’s important to price your home accurately, don’t forget about marketing it well, too. This is one of the biggest, most emotional purchases a consumer will make in their lifetime, so it’s up to the seller to inspire them.”
