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The Pitfalls of "Cost-Per-Square-Foot"

By
Real Estate Agent with www.ExploreBeaufortRealEstate.com (Ballenger Realty) 27941

Habersham, SC CommunityI was showing property the other day at Habersham, one of Beaufort's really fine communities. While going from house to house, the issue of "cost-per-square" foot arose.

You arrive at the cost-per-square-foot by dividing the price of a home by the square footage.

I got to thinking how tricky this measure of value can be.

A builder whom I once asked about "cost-per-square foot" very cheekily responded, "Well, you know, porches and landscaping don't cost anything to build."

His point was well-taken. Cost-per-square foot does not factor in porches, which can be among the most expensive features of the home.

Back to Habersham for a moment, some of the homes we viewed had spectacular landscape packages, tens of thousands of dollars spent on arbors, trellaces, pavers, fencing, and beautiful foliage brought in for the home.

And what about the interior? 

Take the exact same floor plan, with carpet, laminate counters, inset tub units, and  standard appliances, and then build the same floor plan next door, with Brazilian hardwood floors throughout, granite or marble counter tops, tile tub and showers, and upgraded appliances, a la Viking, etc.

You could obviously add tens of thousands of dollars to the value of  a home, without any of that value being reflected in the cost-per-square-foot.

Now, all that said...........

The cost per square foot can be a decent guidepost in two very similar  homes, with similar finish.

As with anything, though, when considering cost-per-square foot, take a moment to step back and look at the "big picture."

 

Comments (1)

Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Keith, an excellent point and so valid.  Thank you for this new-to-me perspective. I have not dealt with clients commenting on per square foot costs, but now I am ready!

Jul 23, 2015 12:57 PM