Cost per Square Foot - Good or Bad Value?

13 June 2015
  Lee Amble, Realtor/Consultaant

Cost Per Square Foot What Does It Really Mean? Good Or Bad Value? Probably Neither!

We are in the middle of the home buying season in most parts of the country, so I felt that this article may help both buyers and sellers. I have written on this one other times, but I want to do one more as this is very confusing to buyers/sellers and even Realtors. In our town of Prescott, Az., our MLS puts the SF cost on the listings and many of us wish they would not as it brings up a whole lot of issues many do not understand. If the SF cost is high, buyers think it is too high and if it's too low, they wonder what is wrong. If sq. footage mst was not on our listings, most Realtors would think that was great! 

Let's look at the difference of why sq. footage cost can be very confusing. I will refer to two of our listed properties in the area where we live; one is $115.00/SF and the other about $185.00. That is a $70.00 SF difference. In my opinion, I feel like they are both an equal value, but when a buyer or seller reads them, they feel like one must be way too high and the other a bad home. Neither factor is right! Let's examine the whys on these two lisred properties; I say they are of equal value with one being $115 per SF and the other one is $185.00! 

Both were constructed in the early l980's. They are both in the same neighborhood. 

Let's examine some of the whys! We will use "L" for lower cost and "'H"' for high. 

L. Great usable lot with privacy. 

H. Professional landscaping and awesome views! +$50,000 

 

L. Three bedrooms and three baths in good condition. 

H. All updated with a cost of approximately +$20,000

 

L Great large kitchen which needs updating. 

H. Smaller kitchen, but all updated. +$10,000

 

L. Older floor coverings. 

H. All floor coverings updated. +$10,000

 

L. Better construction. 

H. Very good, but not as good. -$10,000

 

L. No air conditioning. 

H. Air conditioning. +$6,000

 

L. Location equal. 

H. Location equal. $0

 

L. Newer roof. 

H. Older roof. -$5000

 

L. No updating. 

H. Complete home updated-beyond abawe items +$10,000 

 

L Lower level basic finish. 

H. Better than average finish. +$15,000 

 

In this example the high cost home has about a plus $106,000. The lower cost can be renovated to a new buyer's needs and wants, so which home will really sell the fastest? The higher SF cost. 

I will end by saying the cost per SF really is meaningless in many ways and just confuses the public and may even hinder showings because some will think the higher is too high and the lower is not a quality home. Homes are like a finger print; they are all different! Let's not confuse anyone with the SF cost; you need to see a home to see why it is priced the way it is! 

Thoughts for the Day: 

"Society may predict, but only I can determine my future!"

"The past is over-forget it! The future holds hope-reach for it!"

"Excellence is not being the best - it is doing your best!" 

I hope this gives you some ideas. Thank you for reading. If you have any further questions or ideas for articles you would like to read about in the future, please call me! The call is free and so are my ideas! 

If you have any real estate questions about buying and selling,. feel free to call me. It may save you time and money! 

Remember my favorite sayings, "Remember, Experience Isn't Expensive, It's Priceless!" and, "Selling A Home Is Easy, Doing It Right Is The Key!"

Lee Amble, Realtor/Consultant 

National Realty Of Prescott 
Lee's Cell: 928 533-4455
Jan's Cell: 928 533-4488 

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