Maplewood “Sweet Spot” Sales-A Pricing Analysis

By mark-slade May 2, 2011

Maplewood Homes Closed Sales last 12 Months between $450K-$600K

red orange yellow green
52.3% 15.9% 11.4% 20.5%
>2.0% below asking  <1.9% below asking  at      asking  above asking 
As a Maplewood based Realtor, I constantly find myself having to explain how pricing your home is so critical to the outcome.  While I recognize that a Seller wants as much as possible for their home, studies and experience have taught me that “charging” more for your home when it is launched doesn’t mean you will get more for it; in fact, just the opposite is true.  Otteau Valuation Group states that overpricing a home by $10,000 will result in a sales price that is $3,500 lower than it could have sold for if priced correctly.  As an example of what this means:  a home that an Advanced Comparable Market Analysis (only a handful of agents are trained to perform ACMA’s, and I am proud to say I am one) demonstrates should sell for $550,000 and instead is priced at $600,000 (5X$10,000) out of the gate, will statistically sell for $532,500 (5X-$3,500).  
I have explained this to my clients and yet they still have a hard time understanding this phenomenon and I don’t blame them.  While it is easier to understand the demand and supply will intersect at the point where fair market value is achieved, it still is hard to understand how this works unless you can provide a better sampling of relevant statistices.  I started this blog off with a chart that depicts the range of homes sold for $450K to $600K, which i coined the sweet spot for homes in Maplewood.  There were a total of 88 sales in this range, a bracket normally accounting for up to 30% of the annual transactions in our town and overall, the totality of the homes sold for 1.9% less than asking price, which is a very healthy statistic.    While I am not judging any Realtors or their clients, the overall statistics are quite telling as a touch more than 20% of the 88 homes sold for more than asking price, YES, i did say more than asking price.  Another 11.4% sold AT asking price.  So, for all the good news, 32% of all the homes sold for asking price or better.  That leaves us with 68% to dissect and this is where the statistics come full circle:  52% of the homes sold for a price that was more than the 1.9% average “discount” and another 16% of the homes sold for a price that was just under asking price to as much as 1.9% less than asking price.  More telling is the average DOM–Days On Market–that it took to sell these homes in Maplewood.  For the homes that sold for more than asking price, they sold the quickest as an average of 14.3 days; for the homes that sold at asking price, the average DOM weighed in at almost double or 29 DOM; for the homes that sold just under Asking price and up to 1.9% off of Listing Price, DOM jumps to a touch over 50 days and finally, for the homes that sold at for worse than the 1.9% “discount” from Listing/Asking Price, DOM increased to 63 Days.  
What does all this tell us?  Price your home right and you could sell for more than asking price and do so in less than 2 weeks.  Overprice your home and you can wait for more than 2 months to sell and do so at a 5% discount from final asking price.  I think that more than says it all!        
Mark Slade, SFR, ACMA
Keller Williams Mid-Town Direct Realty
181 Maplewood Ave
Maplewood, NJ 07040
T:  917.797.5059
F:  973.378.3422
twitter:  @maplewoodhomey