Costs per Square Feet

Dated: 04/07/2013

Views: 1736

One way to accurately compare properties is their square footage; however where and how this number is utilized must be employed carefully!

When done correctly the costs per square foot, ($/SF), can provide a good basis for comparing homes’ values, reconstruction costs, insurance costs, making offers, setting asking price and appraised value(s).

In general, the square footage of a home is understood to be the measured “living area” of all rooms above ground. This is known, synonymously, as either GLA, (Gross Living Area), or SF, (Square Feet).  The GLA should NOT include hallways, closets, porches, patios, or garages!   (In areas with basements additional finished space below ground should be notated and will be assigned a slightly lower cost per SF.)

Once you have the property’s GLA you can divide that into the value of the home to obtain the Cost per SF, ($/SF), and then use that result to compare it to similar properties. It is important to note, however, that you must be reasonably confident you are using realistically accurate GLA to begin with or your results may be misleading.

In many areas the property’s GLA is taken from the tax records which may, or may not, be accurate. The tax records often rely on original construction plans which may have been modified during construction. In other cases additions, lofts, and conversions may have been added which were not updated on the tax records. Furthermore, some agents or owners may have simply measured the gross exterior of the building returning a slightly exaggerated total GLA. It is best to rely only on a properly trained, licensed, appraiser to calculate the square footage of a house.

Also bear in mind there are many other items, like condition, renovations, location, etc that all affect value as well. So once you begin to compare $/SF you might have to dig a little deeper to ascertain any anomalies that appear!

Here’s a great example:

 

GLA

Sold $

Date:

$ / SF

 

1544 OCEAN NEIGHBORS BLVD

1,760

$250,000

10/31/12

$142

 

1148 CLEARSPRING DR

2,221

$310,000

10/31/12

$140

 

1025 CLEARSPRING DR

1,883

$270,520

11/01/12

$144

 

1510 OCEAN NEIGHBORS BLVD

2,261

$319,500

11/16/12

$141

 

1805 DAY LILY LN

1,700

$270,000

12/24/12

$159

 

1098 CLEARSPRING DR

2,046

$310,000

01/11/13

$152

 

1002 CLEARSPRING DR

1,899

$225,000

02/19/13

$118

Foreclosure!

1561 OCEAN NEIGHBORS BLVD

1,901

$273,000

02/22/13

$144

 

1155 CLEARSPRING DR

1,772

$234,000

03/13/13

$132

 

 

In conclusion, Costs per Square Feet is a great tool to give you a “range” of value however it should not be your only basis for arriving at value!

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