When valuing a property, price per square foot can be misleading according to an article Daniel Webster, a real estate agent in Breckendridge:
Way, way too many buyers and sellers get hung up on the price per square foot of a property. It appears to be a quick and easy way to evaluate if a property is a good value, however my experience proves otherwise.
In Summit County (on the most common MLS info sheet), just to the right of the “List Price,” is the “List Price per SqFt:” The number after this is the price divided by the size of the property as reported by the Realtor. Years ago this became such an issue that every buyer and seller in Colorado must, before closing, sign the “square footage disclosure,” a Colorado Real Estate Commission-approved form. On this one page are offered nine different ways to measure or disclose the size of a property! Nine — an indication of just how confusing square footage can be.
Beware of ‘the fudge’ factor
When you sign a square footage disclosure you are stating you accept the size of the property as reported by the Realtor. And with a minimum of nine ways to provide this info, you need to be aware this info can be fudged. Read the form and ask questions.
Is all the space even worth measuring?
I have seen plenty of homes that based on the price per foot only appear a great, great deal. Yet the design is poor and there is plenty of wasted space. To illustrate the point, if you want a smaller master bedroom and large common spaces, is a home with an extra-large master bedroom good value? No. Or how about hallways? These are included in the square footage, however what are they worth? Not much if you ask me, they just make the price-per-foot calculation look appealing.
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