This 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.

New Jersey Home

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.  

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.

New Jersey Home exterior

“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:  

New Jersey home living room

  • 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. 
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.


This article was produced and syndicated by MediaFeed.us

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This West Coast city is home to the most million-dollar homes in the US

This West Coast city is home to the most million-dollar homes in the US

Though home prices have risen significantly over the past two years, paying $1 million or more for a house may still seem excessive to most Americans. However, just because million-dollar homes aren’t common throughout the U.S. doesn’t mean they aren’t prevalent in some areas.

To see where million-dollar houses are most common, LendingTree analyzed data from the U.S. Census Bureau’s 2020 American Community Survey to look at the share of million-dollar homes in each of the nation’s 50 largest metropolitan areas.

While million-dollar homes aren’t prevalent in most of the nation’s largest metros, they do make up a large share of homes in some notoriously high-cost areas like San Jose and San Francisco.

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  • Million-dollar homes are relatively uncommon in most of the country. An average of only 4.71% of the owner-occupied homes in the nation’s 50 largest metros are valued at $1 million or more.
  • The prevalence of million-dollar homes can vary significantly by metro. For example, 52.89% of owner-occupied homes are valued at $1 million or more in San Jose, Calif., making it the only one of the nation’s 50 largest metros where a majority of owner-occupied homes are worth at least $1 million. In the metro with the smallest share of $1 million homes, Buffalo, N.Y., that figure is 0.56%.
  • Of the 10 metros with the largest share of million-dollar homes, the four with the highest percentage of million-dollar homes are in California. Driven by factors including dense populations and the significant wealth generated by the tech and entertainment industries, an average of 31.33% of owner-occupied homes across San Jose, San Francisco, Los Angeles and San Diego are valued at at least $1 million.
  • Buffalo, N.Y., Cleveland and Pittsburgh have the smallest share of homes valued at $1 million or more. An average of only 0.61% of owner-occupied homes in these generally affordable metros are worth $1 million or more.

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  • Number of owner-occupied housing units: 711,209
  • Number of owner-occupied housing units valued at or above $1 million: 28,602
  • Percentage of owner-occupied units valued at $1 million or more: 4.02%
  • Median value of owner-occupied housing units: $411,800

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  • Number of owner-occupied housing units: 1,299,739
  • Number of owner-occupied housing units valued at or above $1 million: 60,385
  • Percentage of owner-occupied units valued at $1 million or more: 4.65%
  • Median value of owner-occupied housing units: $298,400

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  • Number of owner-occupied housing units: 1,434,386
  • Number of owner-occupied housing units valued at or above $1 million: 102,450
  • Percentage of owner-occupied units valued at $1 million or more: 7.14%
  • Median value of owner-occupied housing units: $436,600

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  • Number of owner-occupied housing units: 1,143,559
  • Number of owner-occupied housing units valued at or above $1 million: 95,518
  • Percentage of owner-occupied units valued at $1 million or more: 8.35%
  • Median value of owner-occupied housing units: $461,500

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  • Number of owner-occupied housing units: 921,152
  • Number of owner-occupied housing units valued at or above $1 million: 93,058
  • Percentage of owner-occupied units valued at $1 million or more: 10.10%
  • Median value of owner-occupied housing units: $471,900

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  • Number of owner-occupied housing units: 3,643,816
  • Number of owner-occupied housing units valued at or above $1 million: 383,583
  • Percentage of owner-occupied units valued at $1 million or more: 10.53%
  • Median value of owner-occupied housing units: $465,400

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  • Number of owner-occupied housing units: 609,350
  • Number of owner-occupied housing units valued at or above $1 million: 82,402
  • Percentage of owner-occupied units valued at $1 million or more: 13.52%
  • Median value of owner-occupied housing units: $595,600

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  • Number of owner-occupied housing units: 2,129,700
  • Number of owner-occupied housing units valued at or above $1 million: 395,035
  • Percentage of owner-occupied units valued at $1 million or more: 18.55%
  • Median value of owner-occupied housing units: $641,300

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  • Number of owner-occupied housing units: 935,620
  • Number of owner-occupied housing units valued at or above $1 million: 377,736
  • Percentage of owner-occupied units valued at $1 million or more: 40.37%
  • Median value of owner-occupied housing units: $888,500

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  • Number of owner-occupied housing units: 370,241
  • Number of owner-occupied housing units valued at or above $1 million: 195,822
  • Percentage of owner-occupied units valued at $1 million or more: 52.89%
  • Median value of owner-occupied housing units: $1,041,800

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Since the start of the year, mortgage rates have risen dramatically. These higher rates have made buying homes more expensive, even in areas where home prices haven’t necessarily increased.

With that said, because different lenders can offer different rates to the same person, it’s often possible for borrowers to find a lower rate on their mortgage by shopping around for a lender before buying.

A recent LendingTree study found that the spread between the highest and lowest APRs offered to borrowers across the nation’s 50 largest metros who received offers from three or more lenders was 82 basis points. To put that spread into perspective, the study found that those borrowers could have saved an average of more than $63,000 over the lifetime of their mortgages by choosing the lowest rate offered to them.

Though these savings aren’t exclusive to those looking to buy million-dollar homes, higher-cost borrowers are likely to see larger savings the lower the rate they get. As a result, if you’re planning on buying in a high-cost area, one of the best ways you can save money is by shopping for a mortgage before buying.

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Even if you’re not planning on buying a million-dollar home, you may still find yourself in a high-cost area where you’ve got no choice but to spend extra to get a house. Here are three tips outside of shopping around for a mortgage that could help buyers — even those who aren’t necessarily wealthy — make purchasing in an expensive area a bit less challenging.

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Some kinds of mortgages, like those insured by the Federal Housing Administration (FHA), are often easier to qualify for than other types of mortgages. As a result, they can be good options for those who don’t necessarily have a stellar credit score or a ton of cash for a down payment. This is true even in high-cost areas, where FHA loan limits can be as high as $970,800.

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Though options exist for lower-credit borrowers, it’s typically easier to qualify for a mortgage when you have a higher credit score. In a high-cost area, good credit is often especially important, as it can help you get a lower rate on your mortgage that makes housing more affordable. As a result, before you decide to buy, you should try to boost your score by paying down other debts and limiting how often you apply for new credit.

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With remote work becoming more prevalent, it may be possible for some employees to move to lower-cost areas that are farther away from their offices without needing to worry about long commutes or losing their jobs. Of course, you should be certain that your employer won’t call you back to the office before you decide to buy a home that isn’t near where you work.

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LendingTree ranked the nation’s 50 largest metropolitan statistical areas (MSAs) by the share of owner-occupied homes (with or without a mortgage) valued at $1 million or more.

The data comes from the U.S. Census Bureau’s 2020 American Community Survey with five-year estimates (the latest available at this study’s writing).

To determine the share of million-dollar homes in a metro, LendingTree divided the number of owner-occupied housing units priced at $1 million or more by the overall number of owner-occupied housing units in the area.

This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.

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Featured Image Credit: Farnoosh Torabi.

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