How to Calculate Price Per Square Foot for Your Super-Duper Specific Home Search
Price per square foot is a common metric in real estate; many buyers use it to assess a home’s value. But looking at that data alone without some appropriate filtering and context won’t really help you understand whether a house is a good deal or not or how to negotiate with a seller.
Consider the nuances at play when you’re searching for a home, and then do the math that makes sense for your highly specific search. For the most useful metrics, you should be thinking along the lines of: How do you calculate price per square foot for a particular block, area, or neighborhood — or for recent sales? And how do you know which homes and which sales data is actually relevant to your own home search, with its unique specs?
Here’s our expert-sourced guide on how to calculate price per square foot in the most meaningful way possible — with tips on how to choose comparable listings and where you can find accurate sales data for your own area.
What is a square foot?
A square foot is a measure of the area of a space. Think way back to your early math classes when you had to look at a square and calculate how much space was inside the square. To do this, you multiply the length times the width, and voila! Square footage.
Source: (the Calculator site)
In homes, calculating square footage can be as simple as multiplying the length times the width in square or rectangular rooms. But things get a little more complex when calculating the square footage of a room with an irregular shape. The easiest way is to draw a diagram of the space and then break it into easier-to-measure squares and rectangles.
Source: (the Calculator site)
Calculating your home’s square footage can cause major flashbacks to geometry class, but it’s worth it to ensure you’re getting an accurate measurement. Kyle Whissel, a San Diego agent whose team has over 2,300 single-family home transactions, recommends that your agent compare your home’s square footage to tax records and previous MLS listings if the home has been sold before.
You can also hire an appraiser to do the calculations for you. This will give you the most information and allow you to address any discrepancies, such as an unpermitted addition or previous inaccurate measurements.
Common calculation errors
One thing to be wary of while you’re looking at price per square foot is calculation errors, which can occur for a variety of reasons.
Whissel warns against estimating the square footage. Instead, his agency uses the detailed MLS form to “go to the house and physically fill out the sheet, which includes measuring all of the bedrooms” as well as the rest of the house. This is in contrast to agents who “just look at the last time it was on the MLS and just copy everything. They don’t actually take the time to personally walk the house and document everything.” This is one big reason calculation errors occur.
Other calculation errors occur when the square footage of one floor is simply multiplied by the number of floors. In a two-story home, for instance, there may be areas that are finished on one floor but unfinished on another, or the second story may only be a partial story.
