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What does it mean when people talk about the price per square foot of a home?
Some people try to use price per square foot to justify a home’s value, but it’s not an accurate way to price the value of a home.
Price per square foot means that in a given neighborhood at a given point in time, the typical home is selling for a certain price per square foot.
For example, let’s say the price per square foot is $500 and you have a 1,000 square foot house. That house would be $500,000.
Many real estate agents, appraisers, and others talk about price per square foot to determine value, which flat out does not work. The price per square foot is like a broken clock; it’s only right twice a day.
Why? The only factor price per square foot can take into account is the square footage of the house. It ignores other important factors that impact home value, such as location, condition, lot size, yard size, upgrades, and the number of bathrooms.
“Do not rely on the price per square foot to determine your home’s value. “
Sometimes a real estate agent will tell me that a house is going for $580 per square foot to justify their offer. I tell them that’s not a valid way to find the home’s price.
Let’s say someone comes into your house and says, “Hey! Homes are selling for $583 per square foot in your neighborhood. If you sell now, you’ll get $612,000!”
Don’t listen to that agent. Just show them the door.
If you want to know what your home is really worth in the current market, contact a professional agent like myself. We will take everything about your home into account and compare it to recently sold homes and homes that have not yet sold in your neighborhood.
If you would like to know what your home is worth or you have any other real estate questions, just give me a call or send me an email. I would be happy to help you!
