Does that reflect the price per sqft on the house or the property?
The price per square foot is calculated by dividing the asking price by the total finished square footage of the living space of the house. This is usually can be found in MLS or Appraisal District Office Records. But what does it mean?
Home buyers and sellers face a real challenge when attempting to place a fair market price on a home. There is not one exact, perfect price for home because so many factors contribute to the price. To state it simply, here is an example:
A property with outdoor improvements such as, shop/barn/landscaping/trees/fence/pool/well etc., will impact the “price per square foot” and will show a higher dollar amount vs. a property with no improvements. Take those improvements off, and the price per sqft will drop and will reflect the square footage for the actual living area of the house only.
These are just a few of the factors that affect the price per square foot. Condition, lot size, interior amenities and type of constructions/foundation have a major role as well.
New Construction vs. Pre-Owned – new construction homes usually come with no outdoor improvements and will run between $130-$150 per sqft in most neighborhoods. To add improvements such as a shop, landscaping or a pool means to add value to the property. As the cost to add these improvements do not come without significant investment, the price per sqft will increase to reflect the added improvements.
Most buyers would like to have these improvements in their home, but most buyers may not have the additional money to make them a reality. Buyers needs to ask themselves questions. For example: will they need a loan to build or add these improvements? Are they financially qualified to secure a loan after purchasing a home? Many buyers, in my experience, would rather wrap the cost of these improvements to the initial loan. So the question at this point for these buyers, would you rather buy a home with or without these improvements?
Buying a home is more than price per square foot. Ask your Real Estate Agent to help you compare “Apples-to-Apples” to better understand which house is the best buy for you.
