Price per square foot? Not the whole story
It’s “Overpriced” They Said!
The home at 125 Plantation Way, Palmetto Plantation, Santa Rosa Beach, Florida 32459 sold for the highest price per square foot in the subdivision. Naysayers lost, as real estate agents and home buyers erroneously thought that “price per square foot” was the only way to price the house. Wrong. This two bedroom home in South Walton County, sold for $335 per square foot for a sale price of $322,000. Shocker? Not to this Santa Rosa Beach-Destin real estate agent. It even appraised at $330,000, which is $343 per square foot. The highest other sale in Palmetto Plantation was $315 per square foot for an 1126 SF home.
What gives? Agent feedback was “concern” that the house was overpriced. The entire extent of their analyses, and that of their buyers, was “price per square foot”. Please read my previous blog post about “Justifying Your Low Offer?” I outline factors commonly used by appraisers to value a property for a real estate sale, apart from “price per square foot”.
Price Per Square Foot Is Not The Whole Story
Here’s another way to think about the “big picture”. Smaller homes, other things being equal or similar, generally sell for more per square foot compared to larger homes. We are not talking thousands of square feet (or hundreds) in difference, but a moderate amount. Remember, a house that’s 1000 square feet has an air conditioner, hot water heater, roof coverings, a kitchen, plumbing, etc. High priced items will cost close to the same for a larger home and a slightly smaller home. Add-ons to simply increase the square footage, may cost less per square foot than the main items in the home that substantiate overall price. In other words, adding 200 square feet to a house is cheap, so it lowers the price per square foot. Here’s a short article from a builder who explains price per square foot fallacies well.
Finally, rely on common sense, intuition and a test of reasonableness when making an offer for a home in Santa Rosa Beach, Florida. If you are thinking of selling, contact an experienced agent whose price analysis of your property goes beyond the simple price per square foot.