Fred’s Corner: Square footage analysis

Fred in the window“Humm. I wonder what this home’s square footage is”.

My mom, Jenean asked me to address this issue because she says that I have more feet to stand on. Every once in a while she runs across a buyer (usually an engineer) who is busy comparing the price per square feet in the market place as they want to know that they are getting the best ‘deal’. This is what I hear her say: If you compare homes simply by $$ per square feet, you are looking at a less-than-accurate measure of a home’s value. Besides the size of the interior of a home, the home’s value is determined by the: 1) Condition of the home; 2) Size of the back yard; 3) Number of garage stalls; 4) View or no view; or 5) If it has street noise or is next to something undesirable. There is also a vast difference in price per square foot from one size of home to another. Take a look at three homes she sold this summer:

  • A 2-bedroom Lake Forest condo in Tierra Vista with a 1-car garage, no yard and 1,000 square feet sold at $280,000. That is $280/sq. ft.
  • A 3-bedroom single level SFR in Santa Ana with a 2-car garage 1,505 square feet and a large yard sold for $375,000. That is $232/sq. ft.
  • A 4-bedroom Lake Forest two-story SFR in Parkwood Estates with a 2-car garage, 2,975 square feet and a medium-sized yard sold for $595,000. That is $184/sq. ft.

The first home certainly was the lowest price. Was it the best deal? Not if you look at the $$ per square foot. Was it one of the most affordable homes a first-time buyer could buy? YES!

The second home was moderately priced. At $232/sq. ft., was it the best deal? Actually it sold for one of the highest prices in the neighborhood, but the buyer was able to buy this immaculate home with 3.5% down. That means that they won’t need to use cash out of pocket to fix this home up like the buyers of the REOs are having to do. So, was it a deal? YES!

The third home is the largest home with the smallest price per square foot. This is usually the case. The smaller the house – the higher the price per square foot and vice versa. Was this home the most affordable? NO. Did the buyers get a house that their family can grow into over the years in a wonderful neighborhood? YES!

So, when deciding what house is the best home for your family, remember to think outside the square footage box and go for one that fits in your budget and close to the things that are important to you.

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