January 27th, 2015
MLSs use it. Insurers use it. Appraisers use it. Tax Assessors use it. When it comes to real estate, there’s no avoiding square footage as a measure of any home’s value. But how much is square footage worth to you as a homebuyer? Knowing the square footage can be helpful, but it shouldn’t be the main tool to determine your offer price.
Square footage measurements aren’t exact, nor are they taken the same way by every person. For example, your local tax assessor or appraiser may determine square footage by measuring the outside of the house. A real estate professional, on the other hand, typically counts only indoor living space to determine square footage.
Real estate listings for single-family homes do not include square footage for covered “outdoor” spaces, including porches, verandas, balconies and porte-cocheres. Yet, in high-rise buildings, square footage quotes often include balconies.
Further, some elements such as stairways and closet spaces are also open to interpretation. If you’re buying a home with a two-story foyer, is that foyer space also counted on the second floor?
Another measure that’s subjective is the price per square foot, which is determined by the number of square feet divided into the price of the home.
High-end homes with expensive materials such as granite countertops and finishes such as hardwood floors tend to have a much higher price per square foot than more affordable homes. But what if those high-end features are 20 years old, and you’re comparing them to other similar homes in the area that are brand new?
Hallways, landings and stairs can add hundreds of square feet to any home, but is that space really livable? An open floor plan may have smaller square footage, but be much more pleasant to live than a larger home with too much space allocated to getting from one room to another.
All this means that valuations based on square footage are and should be somewhat subjective.
If you’re confused about what you are paying per square foot for your next home, ask your real estate professional how the home was measured for the listing and compare it to local tax roll data you can find. If there is a bank appraisal, you can ask the appraiser how the square footage was determined.