Calculating square footage can be a useful exercise, though deceptively simple when trying to consider inhabitable living space. Recently, homebuyers in San Francisco raised a common question that deserves some discussion: “How can you estimate value for two homes on the same block that started at the same asking price when one of them showed larger square footage?”
Often times at Zephyr sales meetings, we discuss the finer points of contracts and the law. This past week we reviewed the common inaccuracy of square footage calculations. Each person seems to perform their calculations differently, some round up, some round down. Each listing agent may utilize a different source; such as a graphic designer, the San Francisco tax records, an independent estimator or the most recent appraisal. Depending upon whichever shows the greater size, or hides or highlights various aspects of the building – they may all be incorrect. Judging the value of a home by it’s square feet alone can quickly lead to other errors in judgement – and here’s an example of how:
Two Single Family Residences are for sale on the same block.
- House #1 is estimated at 1,500 sq. ft. with an asking price of $1,000,000.
- House #2 is estimated at 1,350 sq. ft. with an asking price of $1,000,000.
Using the entire price listed, per square foot, of a SFR house may lead you to believe the value is $666 per sq. foot.. The house next door is 150 sq. feet smaller, and is listed for the same asking price.
Shouldn’t the price be $899,100K instead of $1 million? Not necessarily…