As one drives through any relatively defined ‘neighborhood’ there will often be a consistency with regards to the look, feel and size of the homes. Average square footage size in a neighborhood is often easily found in looking at comps from recent listings or sales. Price per square foot in these homes is often a great way of comparison and a common denominator when realtors in turn price a home about to hit the market. There is often a problem when a home includes ‘extra’ space that isn’t found in the range of ‘average’.
Recently this played out in a typical ranch style floor plan where the average square footage of the 3 bed, 2 bath homes was 1400sf. This ranch, however, had a just a little something extra in the form of being 1600 square feet. Just a little extra elbow room. The ‘problem’ in putting a market value on a home like this is that the fall back price per square foot does not often work. Rarely does the extra 200 square feet from our example add the equal price per square food to the home’s value. If an average home is valued at $100 per square foot, that extra 200sf does not always mean $20,000 more in value to buyers. The value for the “extra” does not always mean “more money” in the apple for apple sense.
The extra space may mean more, but the amount or extent of value is usually going to be in the court of potential buyers or indicated in where the extra space is located. Extra bedrooms, bathrooms, or sun porches often have the highest return and best chance for getting that full price per square foot. The ‘stretch’ of a floor plan by increasing the entire house by a couple feet on each side is not always as visible and therefore not always as high of value to potential buyers. If the extra space is in a more unique feature or addition to the home, then the value will be in the eye of the beholder – the buyers.
Therefore, in this scenario, hiring an expert realtor team to help value a property for sale or in turn, help negotiate a price as a buyer you think is fair to pay is the best way to make sure one is not overpaying or overpricing a home.