A bidding war helped this New Jersey home sell for 50% over asking price

A good location can mean many things. Maybe a house is close to public transportation, on the water or in the city center.

In the case of this home in Summit, it sold for 50% over asking price because of its location. But not for any of those reasons.

“It’s a split-level home on a busy street,” said Natalya Price of Compass, the real estate agent.

The price was driven up by buyers moving from out of state, determined to live close to family so their children could go to school with their cousins, she said.

“It was the only city they could consider,” Price said. “They wanted to be close to family.”

Even before the pandemic, inventory levels were low across the state, helping prices continue to rise despite higher interest rates.

“In a normal pre-COVID inventory, we would have had 100 homes on the market in Summit,” she said. “Now we rarely reach double digits.”

So when a home comes on the market in a town like Summit, where schools, commuter friendliness and community are coveted, there are plenty of buyers vying for it. Especially if the home doesn’t need any renovations.

“With occupancy comes a crazy bidding war,” Price said.

Another home in Summit sold in April for $450,000 more than the asking price.

When Price listed the four-bedroom, two-bathroom split-level home for $1,100,000 on May 29, she received an offer on the second day of viewings.

“We got an offer right after the open house,” she said. “It was a great offer, but we only had four hours to respond.”

Price reached out to another agent who brought the buyers who wanted to move close to family. They had toured the home and then returned to the open house with their whole family and spent a lot of time asking questions, she said, so she wanted to let them know there was another offer.

Price also canceled the second open house scheduled for the next day, triggering six more offers.

“A big driver has been the latecomers, people who don’t have a home yet and want to be there for the school year,” Price said. “They’re willing to pay more just to get into school.”

The house presented well, she said, because she worked with the sellers to spruce it up before listing. The inside and outside were painted, new lights were installed and the sellers moved out, after which Price fixed up the house, she said.

“When you see a home that’s been very well maintained, it puts people at ease,” Price said. “That’s a deciding factor for them in their search.”

She hoped to sell the house for $1.4 million. “I was pretty sure it would go for more than the asking price,” she said. “But the final amount surprised me.”

The home’s sales price on July 9 was $1,650,000, which is $550,000 more than the asking price.

The median sales price of a home in Summit was $1,510,000 in May, according to the most recent data available from New Jersey Realtors. That’s about 4% higher than a year ago, when the median sales price was $1,451,000.

Are you a real estate agent, buyer or seller active in this changing market? Do you have tips on the New Jersey real estate market? Unusual offers? let us know.

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Allison Pries can be reached at [email protected].