Does square footage matter?
Posted March 15th, 2018
One of the most important factors in deciding on the selling price of a home is square footage. In estimating a selling price of a property, a lot of realtors refer to the tax records for their cost per square foot calculations. However, these calculations are not always accurate.
There are a few reasons for this, like additions, inaccurate building plans or changed plans, but primarily the square footage is usually estimated for tax purposes using a variety of factors.
Why does this matter?
For example: One day you pick up the tax records from the assessor’s office and find that a home you’re selling is recorded to be 2,300 square feet. On average each square foot is $100, making the home appraise for $230,000.
Now let’s say someone makes an offer of $225,000.
You start the sale of the home but the appraiser then takes measurements of the home and finds it to be 2,100 square feet. This is a difference of 200 square feet. Which is a huge error, but not uncommon.
Now, because the home appraises for $210,000, which is $15,000 less than the selling price, the buyers have to decide whether or not they want to purchase a home under those circumstances. Because buying a home appraised less than the selling price affects different aspects of financing, the buyers are likely to revoke their offer.
This could’ve been easily avoided by having the home measured before the initial calculations.