Currently the Atlanta real estate market is officially a seller’s market. The vast majority of homes are selling fast and with multiple offers sometimes leading to a bidding war. There are many reasons that contribute to the creation of a seller’s market and lower interest rates and lack of inventory are two of the most compelling.
The idea of multiple offers and a bidding war excites homeowners who assume that a seller’s market means their homes will automatically be snatched up for unimaginable prices!! It’s simple, right? Low supply and high demand equals everything sells! Well, not so fast.
A Case Story
Recently Gail and Claire met with an excited seller. His home had already been on the market for over 400 days and listed at over $1 million. It was a lovely brick traditional built in 2005. The small dining room was red with heavy tapestry draperies and double dentil moulding. The spacious basement was also bright red. All the custom dark wood paneling in the small office was very expensive. The kitchen cabinets were also custom and in the French cream color that was incredibly popular in 2005. All of these design choices, while pleasing to the homeowner, did not bode well for a selling success story much less a bidding war. However, the seller fully expected his home would appear irresistible to buyers and they would be lining up to pay top dollar.
What he didn’t know is that the market views his home as an investor property. Investors make up a small percentage of buyers who are willing to invest their time and money into a renovation. Investors expect to buy at wholesale as they will need to invest (typically) thousands of dollars to make the property highly sought after and attract multiple offers. Investopedia defines an investment property as a real estate properly purchased with the intention of earning a return on the investment with the future resale of the property.
Networks like HGTV produce multiple shows around this idea and have heavily covered this concept and help popularize the name “flipping” which is what happens to investment properties.
A process that involves buying the property for a good price, sinking money into, at the very least a cosmetic redux, and very often a gut job and complete rework of floor plan. Once the home is ready, the investor then lists the newly updated and freshly appointed home at a price that offers the investor/flipper a great return on investment.
Check back for Part Two of this blog post and learn what buyers really want. In the meantime, don’t hesitate to contact Gail and Claire today for an assessment of your property. They can view your home objectively and provide clear steps needed to get your home sold!