Buying Real Estate: How Important is Price Per Square Foot?

comparing real estateIf you are thinking of buying a home, you may have come across mentions of the price per square foot or price per gross living area in listings of north Atlanta homes for sale. So what exactly does this figure mean, and how should it influence your home search? This article from the Georgia Real Estate Appraisers Board provides a great overview of the subject.

What is price per gross living area/price per square foot?

“Price per square foot” is a bit complicated, because square footage of a home can be calculated a number of different ways. This leads to confusion when it comes to identifying exactly how various properties compare to each other. A home’s square footage can be calculated as:

  • Total heated space
  • Above grade (ground) space (This would exclude finished basement areas like game rooms, wine cellars, media rooms, etc.)
  • Above and below grade living area, + enclosed spaces (porches, sunrooms, etc.)
  • Living area above land line with heating, lighting, and ventilation.

As you can see, these different methods for calculating price per square foot could potentially yield wildly different results. But aside from this lack of consistency, there is another reason why price per square foot is inadequate as a metric for comparing homes.

Does price per square foot matter when house shopping?

Even in two homes that have had their square footage calculated in exactly the same manner, the price per square foot is not necessarily a good indication of home value. Think about grocery shopping, for instance. You probably use the price per unit labels to help you make purchasing decisions. One product may be slightly more expensive at 12 cents per ounce as opposed to 9 cents per ounce, but if the more expensive product is of a higher quality, you wouldn’t mind paying those extra 3 cents per ounce to ensure you enjoy your purchase. Comparing price per square foot must be approached similarly.

Not all square footage is equal. Comparing a marble bath with high end fixtures to a builder basic bath with contractor grade everything based solely on square footage is comparing apples to oranges to say the least. (To learn more about appraising home value, check out 10 Common Appraisal Questions Answered by the Experts.)

By working with an experienced north Atlanta Realtor, you’ll benefit from the guidance of a professional who understands the finer points of the local real estate market and can assist you with finding the perfect house for your needs and budget. Contact me, Barry Wolfert, today, or visit my listings to browse homes for sale in Marietta, Roswell, Kennesaw, and other north Atlanta communities.

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