Realty Executives Gateway Realty


Why Price Per Square Foot Means Nothing

Why Price Per Square Foot Means Nothing

We are saying that price per square foot has no bearing on the value of a home. Let's say that there are a bunch of houses in a neighbourhood, and they have exactly the same floor plan, you pick one of these houses and it’s very similar to many in your neighbourhood. 

But what if one person puts in laminate kitchen counters and another puts in granite? What if one adds on an amazing screened in back porch and the home next door doesnt have a porch or it isn’t fenced or landscaped or they sit on a quarter of the size of land? Are you going to say that the price per square foot is going to be exactly the same? Of course not! It’s not the same, because the one house had many more upgrades, it had many more features, it had a lot more outdoor living space, which is not included in the square footage of a house. 

So if someone is valuing a house purely based on price per square foot, call them out! This is a lazy way of deciding an accurate value on a house. What we really need to do is to evaluate the price of the house - is find the value of a house. Granted, everyone's opinion of a house is just that, an opinion. Even if you get an appraisal done on your house, that is still just one person’s opinion, so you might want to take it with a grain of salt. But if you have several SOLD comparables in your neighbourhood, we can look at them and get a price range. We also want to look into the market stats of the area - how is the market doing? Is it a sellers or a buyers market? Then we can make adjustments from comparables, did one have a three car garage and the other a 2 car? A garage is not counted as living space, so it will not be counted in the square footage. But wouldn’t you pay extra for a three car garage? In conclusion, there is many factors that goes into appraising a property, and it is not something you can just mash out in a few minutes. 


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