One of the most misunderstood aspects of real estate is dollars per square foot ($/sf). Even with my own clients it can be difficult to get them to realize there are too many factors that go into pricing real estate for this to be a reliable statistic.

What is $/sf?

If you take the sales price divided by the size of the home you will have calculated $/sf. Comparing 2 homes by $/sf would be fine if both homes are exactly the same, but that rarely happens.

Here are some of the reasons why comparing homes by $/sf may not be accurate:

1. Lot value as part of the overall home value.

The value of the lot is not considered when calculating $/sf. A home that is on a more valuable lot for whatever reason (size, greenbelt, swimming pool, etc)…

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