Take a Peek Inside The New Jersey Home Just Received 71 Offers (& Sold for 46% Over Asking)

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With housing inventory falling to historic lows across the nation, prospective buyers continue to face stiff competition this spring. 

According to the latest data from the National Association of Realtors (NAR), properties for sale across the country stands at around 1.1 million units, a 24% drop compared to the months before the pandemic.

Image Credit: Farnoosh Torabi.

Bidding Wars

In West Orange, a New Jersey suburb about 30 miles west of New York City, selection is scarce and bidding wars are the norm. This month, a 1,200-square foot, 3-bedroom home listed for $424,000 attracted a whopping 71 offers. The home borders Montclair, NJ, an attractive suburb known for its many restaurants, shops and hot cultural events like the Montclair Film Festival.  

Image Credit: Farnoosh Torabi.

46% Above Asking

The property ultimately sold for $618,000 —  46% above asking – and the deal registered the highest list price to sale ratio of all homes in West Orange in the last 12 months. 

“I think that a lot buyers – and most of them are coming from Brooklyn, Jersey City, the Upper West Side – start out looking in the more well-known towns like Montclair, Glen Ridge, Maplewood, and then sadly get priced-out,” said Heather Kandawire, a real estate agent at Keller Williams NJ Metro Group who represented this home’s sellers.

Image Credit: Farnoosh Torabi.

The Trappings of Suburban Life

“Buyers have started to look for other towns that still offer all the trappings of suburban life – a nice yard, good neighborhood, good public schools, parks, restaurants, and train access to the city. Towns like West Orange, Bloomfield, Verona, Cedar Grove, and the Caldwells are deservedly getting more attention.”

According to Kandawire, sellers in tight markets are not only seeking the highest bid right now, but also the strongest all-around contract.  (Read Kandawire’s seller’s guide here.)

If you’re a buyer looking to make your offer stand out, she suggests the following steps:  

Image Credit: Farnoosh Torabi.

1. Have a strong down payment.

In competitive markets, a 20% down payment or more is typical. Not only will the buyer enjoy lower monthly payments and pay less interest over the life of the loan, but it also demonstrates financial strength to the seller making it more likely to get to the closing table without issues.

Image Credit: Front Door Photography.

2. Offer strong appraisal language.

“The ‘strongest’ language is to waive the appraisal completely,” says Kandawire. “This means that if the bank doesn’t appraise the property for the offer price, that the buyer will cover the gap to make up the difference.” In her sales region, most homes are appraising, but sellers still prefer that the buyers take the risk. “In this market, sellers can be choosy!” she says.

Image Credit: Front Door Photography.

3. Get preapproved with a reputable, local lender.

A local lender’s pre approval can demonstrate to the seller that your financing is secure and can often expedite the loan process, giving you an edge over other buyers.

Image Credit: Front Door Photography.

4. Meet the seller’s requested closing date.

Aligning with the seller’s preferred timeline shows flexibility and can make your offer more attractive, as it decreases the risk for delays and simplifies moving plans. When in doubt about a seller’s timeline, offer an expeditious close.

Image Credit: Front Door Photography.

5. Avoid having a home sale contingency to qualify for your mortgage.

If you need to sell your existing home before completing your offer on a new home, this can significantly reduce your chances of the seller choosing your offer.  By not having a contingency, you present yourself as a more reliable buyer, decreasing the likelihood of the deal falling through and making your offer more competitive.

Image Credit: Front Door Photography.

6. Limit the home inspection to major issues only (no ‘nitpicking’).

 Focusing only on significant problems during the inspection can reassure the seller that you are serious and reasonable, which can smooth the negotiation process and speed up the sale.

Image Credit: Front Door Photography.

7. Waive a certain dollar amount of inspection issues.

If you discover major issues in the inspection, accept responsibility for the first $5k, for example. It demonstrates to the seller you’re committed and willing to compromise, reducing their burden and potentially giving your bid a significant advantage.

You can read Kandawire’s complete buyer’s guide here.

Farnoosh Torabi is a longtime financial journalist, expert, author and host of the Webby-Winning So Money podcast. Follow her on Instagram.

Image Credit: Front Door Photography.

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