Price Per Square Foot

Number 3, price per square foot, is especially interesting to me.  The advice doesn’t go far enough.  The problem is, price per square foot is a number people can relate to; it’s something tangible, so baring any other factors they can understand, they fixate on price square foot.  But there are so many variables that negate the usefulness of this figure.  How much did it cost for site prep?  If a huge hill had to be moved or a huge hole had to be filled, the cost of site prep could have been bumped way up and is included in the price per square foot.  Likewise the cost of the land.  Site prep and the lot price have nothing to do with the quality of the house.  Another factor is the quality of the materials.  Roofing, flooring, fixtures, countertops, doors, windows, hardware, even the material used for the interior and exterior walls; they all run the gamut from low to high quality.  If a person rejects a home with a high price per square foot, they may be rejecting a high quality home and end up with a low quality home.  So what to do?  Go by the CMA, the Comparative Market Analysis.  See what similar homes in the area sold for within the past 6 to 12 months.  That’s the best way to tell if you are paying the right price.  An appraisal is even better.  If you are getting a loan your bank will order an appraisal and you will be able to tell if you are getting a deal or paying too much.  If you are paying cash, the extra $500 to $700 for an appraisal could save you from making a grave error or buy you some comforting peace of mind.