Yes, we've all been there! You are right that statisticly the smaller home, equal in tangible assets to a larger home, will sell at a higher SP/SF. I am not clear if the subject home is your listing, a potential listing client, a FSBO or listed by another agent. My comment pertains to your listing or potential listing client. For the others, let the purchase negotiations speak for you. Nothing is real until a purchase contract is presented. Buyers and sellers often don't adjust to reality until the best deals for them have vanished.
Unfortuneately, statistical data rarely influences the person presenting this question. They have a different need that must be addressed. You must determine if the need is lack or motivation or seeking greater assurance.
In addressing the question presented, I like to start with the statement, "My home buyers repeatedly say they will know the house to buy the moment they open the front door." In essense, the decision to buy is emotional, justification to buy is in the statistics. Predicting what emotion will be activated by an individual buyer is well above my pay grade. To a home buyer, a home that says, "HELLO" is of greater value than the pool and themal windows. The giant Florida Oak that shelters the home is a asset to one buyer and a hazard to the next.
Lastly, if you apply the home down the street SP/SF to the target home, then do a comparable, the target home should be at least 10% above comparable list prices. We know what happens when you exceed 10% of the buyers value bracket. The DOM pyrimid and the potential for further downward market adjustment equate to a fatal error in pricing.
Have a exceptional 2010!
ReMax ACR Elite Group, Inc
727. 420. 4041
Over the past 10 years as a Realtor I've always disliked the simplified approach of using the price/sq ft to estimate a value for a property. An appraiser doesn't compare properties this way, Realtors should not also use this defective method of comparing property values. I know some Realtors may use the Pr/SF to their advantage to attempt to get an easy sale with a lower asking price. I am now recommending (in this declining market) that a seller pay the $350 and get a full appraisal from an experienced appraisal knowledgeable of the neighborhood. That way the appraisal will give the owner a very educated idea of value and it also helps me should I ever get a disgruntled seller who thinks they listed their house too low!
So.,....using that line of reasoning, if a house is twice as big as this house, and it's in the same neighborhood, it should sell for double the price?
I keep thinking of the law of diminishing returns and how it can be applied when computing market values by square footage.
So many possible responses: any upgrades? staged? curb appeal? timing of the sale? any credits?
You can probably find statistics that will support the truth of the matter that smaller houses within the same neighborhood almost ALWAYS sell for a higher price/sf. It's the price of admission to the neighborhood. Especially a very nice manned gated neighborhood like Chapman Manors/Windsor Park.
So, I would go to various neighborhoods on the MLS (i.e. Westchase, Tampa Palms, Waterchase, The Eagles) and you should be able to get a report of SOLD properties and show it to the seller to prove your case.
I look forward to our closing later this month! It's been great working with you and Fifika!
All the best,
Of course there are also different motivations for selling a home and buying a home. Maybe the house down the street had a buyer that could not possibly live without purchasing that home, and paid a premium for that reason.