Price per square foot seems like a logical way to figure out value of a home right? WRONG!
Guilty! Buyers, sellers, Realtors … all guilty! All are at fault for using price per square foot (psf) when attempting to come up with the price of a home.
It’s pretty easy if you think about it. Even I can do the math (with a calculator): divide the price of home by the air conditioned square footage of the home and come up with price per square foot. Once you have that amount per foot it should be an easy way to figure out prices for other homes in area too right? Wrong!
“The last time I checked, price per square foot was not something they were teaching in Principles of Real Estate or Valuation of Homes,” explains Robert Totten, Fort Worth real estate appraiser. “I have been an appraiser for over 35 years and never has using price per square foot been a way to come up with a value for a home. There is no class called Pricing a Home with Price Per Foot.”