Unlocking the 12 Reasons why you should Ignore Price per sq. ft.

Appraisal’s Greatest Secrets Revealed: 12 Characteristics Influencing your Home’s Value.

If you are a single family home buyer’s or seller’s agent, you had your share of conversations with buyers and sellers who want to base their purchase or sale on recent prices per square foot.  This is a terrible idea.   

Price per sf is like miles per gallon in a car. It is as easy to calculate as it is useless in determining fair market value.  Did anyone ever offer to buy a car for $1,000 per MPG. Or has any buyer ever said to you lets offer $473.27/sf for that colonial home in Newton? 

Plus in most case in MLS pin the square foot is WRONG. I just measured a home listed as 1,350sf in Needham and it was 1,750sf. 

I would add a few things to Mark’s article regarding the single family market. He is in another state but the principles regarding what gives value to residential real estate apply to any real estate market, especially in our area, greater Boston and the suburbs.  

The author writes that trying to compare two properties based on their price-per-square-foot calculation is a recipe for disaster. First off, I can think of 3 very important aspects to a property that are being ignored when you try to do this:

However, he actually lists 4 aspects of real estate  

1 Location
2 Lot
3 Usage
4 Condition 

Here is a more thorough list that you can use to have a conversation and help educate your buyers or sellers.

#12 speaks to the overall market conditions (Increasing? Decreasing? Shortage? Oversupply?)  

But really it is the things we can experience, the physical key characteristics that give value to real estate.

These characteristics influencing your home’s value include, but are not limited to, the following: 

1.       Location
2.       Lot size and utility
3.       View
4.       Style
5.       Age
6.       Condition
7.       Quality
8.       Size (square feet)
9.       Floor plan and utility (#room/#bed/#bath)
10.   Parking
11.   Other amenities
12.   Time – When the home sold 

A Newton realtor who primarily works with sellers tells me most home owners have done their own research and are sure they “know” prices. They are selling one or maybe two homes in their lifetime and he is party to dozens and dozens of home sales per year.  My money is on her. 

Need a prelisting or prepurchase consultation or appraisal , or have other questions? 

 

The team at Aladdin Appraisal welcomes your inquiry.  Please send a message with your questions and we will reply within 24 hours.

Here’s our contact information:

Address: 187 Auburndale Ave, Suite #2, Auburndale, Massachusetts 02466
Email address: info@aladdinappraisal.com
Phone number: 617-517-3711

We are open to assist you from 8:00AM to 8:00PM (EST)

 

Also, please join us in celebrating our 11th year Anniversary in the industry by giving us a thumbs up on our Facebook page.

 

 

Adam Wiener
Chief Appraiser
General Contractor 

PS Thanks to Mark a broker in our 50th state for writing on one of my favorite topics

 

 


About Adam Wiener

I provide attorneys and accountants with date of death, estate, tax and bankruptcy appraisals. I help realtors and homeowners set effective listing and offering prices and deal with appraisal issues.

And…due to my extensive construction and appraisal background, my sweet spot is helping homeowners with growing families make a decision whether to add to their existing home or move to a new home.

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