Since square footage is directly related to the price of a home, it’s no wonder that buyers zero in on it. But how accurate is the number marketed by sellers considering they want the highest price for their listing? You might be surprised.
Figuring out the exact square footage of a house can be tricky — a job best left to the professionals. Here’s what you need to know when representing a buyer.
Don’t assume the square footage number on a home’s listing documents is accurate. It could have been taken from the builder’s original floor plans or outdated tax documents. Or the house may have been measured by the listing agent, who may not be professionally trained.
Hire a licensed appraiser
An experienced, licensed appraiser is qualified to determine the square footage. The cost, in the $200 to $400 range, is worth your buyer’s peace of mind. If the house is new, ask the builder for a copy of the floor plan and verify that it hasn’t been changed.
How is square footage measured?
The rule of thumb is to include all living areas that are heated, finished, and directly accessible from the main living area. Many appraisers will start by measuring the house’s exterior to determine the gross living area, then make adjustments to find the exact square footage. What about a basement? A basement is included in the total square footage only if it is finished and directly accessible from the main living area. Is a room with a sloped ceiling or dormer considered a living space? Any area with a ceiling height of less than five feet is not included in the total square footage.
The bottom line, professional measurement is essential. Not only does it ensure a fair price, but it also helps homeowners know if they’re paying the proper amount in property taxes.
Calculating the price per square foot
The price per square foot calculation is simply the house price divided by the total square footage. Human measurement errors can result in a mistake costing thousands of dollars. If different people take different measurements, it is still possible to get different answers even when using the same ASNI standard. Therefore, quoting the price per square foot to your buyer or seller is perfect for coming up with the wrong market value.
Finding the right price
The price per square foot can be determined by comparing similar homes in the same development or community. Except for a tract community with like floor plans, it is difficult to find properties that are alike in features, amenities, and lot location. Upgrades can add thousands or more to the value of a property. For this reason, expert appraisers and real estate professionals use a comparative market analysis (CMA) as the gold standard in determining approximate market value and setting a listing price.