Is “Price Per Square Foot” The Best Way To Value A Home?
August 3rd, 2011 | categories: Buying Real Estate in Coconut Grove, Coconut Grove Real Estate
You may notice here on the blog that I always talk about “price per square foot” when determining the value of homes. But is that truly the best way to value a property?
During the boom and before the bust a home’s value was based on the number of beds, baths, location, age, upgrades and charm. However in our current environment banks (i.e. appraisers) dictate the new system which is based on square footage of the home and of the land. Unfortunately this made the process very sterile and doesn’t give as much credit for the character of a home or its quality. Buyers are using this same method of valuation to justify lower prices on certain homes.
We see a few exceptions to this rule when the buyer can pay cash and falls in love with a home that has “Grove” charm. For instance, my coral rock house on Hardie sold for $496.00 per square foot. If you valued based solely on square footage it would have sold somewhere around $300.00 per foot. But the cash buyers were willing to throw “PPSF” out the window to get one of the most iconic homes in Coconut Grove.
So although it is not the ideal or preferable way to value a home, ”price per square foot” looks like it is here to stay.
If you are interested in buying or selling real estate in Coconut Grove and are looking for an experienced real estate agent please do not hesitate to contact me at 305.342.1623 or send me a message here.
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