Imagine you are buying a home. You tell the Realtor, "I want to buy a house with 3 Bedrooms and 2 Baths and I want to pay $50 per pound."Excuse me? How silly is that? It's as silly as a buyer telling a realtor what he/she wants to pay per square foot.
Buyers buy a house based on their needs and desires. They look at each house in their price range and weigh the variables, comparing location, view, size, condition, age, amenities and outdoor living. They place a value on each of these conditions depending on what is most important to them.
Price per square foot is the benchmark by which those values are measured. It acts as the bar for comparison. That bar rises and falls depending on the market. When foreclosures and short sales enter, the market the bar lowers.
There is no hard and fast rule about price per square foot. There are too many variables. It's subjective. In Fountain Hills the price per square foot can range from a very low of $100/sf (mostly for bank owned) to over $500/sf. for a luxury home.
How can a seller know what buyers are willing to pay? The answer lies in analyzing what buyers have paid within the last 3 to 6 months for similar properties. An experienced, professional Realtor will weigh the variables of each house and what they sold for per square foot, to learn where the bar is. That's part of pricing a house to sell.
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