Unfortunately, inaccurate information is one of the hazards of shopping online. Smart Money magazine tells us that erroneous and out-of-date information has become more common with the rise of online shopping.
At any rate, the prospective buyer should always maintain a healthy amount of skepticism. In the example you site, there is definitely a question about the accuracy. If the listing information seems wrong, you can call or email and ask for the correct information. In fact, until you're sitting at the table negotiating, it's a good idea to keep asking questions and going over the information you obtain.
In all cases, the information online should be regarded as a starting point. And something like square footage can signal a listing is worth further inquiry. If the price per square foot seems high for a particular neighborhood, then the listing must show well or could have had recent renovation. The third possibility - that the owner has listed the price too high - is what buyers tend to avoid. So, a high price per square foot might arouse my curiosity and I might make a phone call, but many times it is a case of pricing too high. On the other hand, if I am looking for a lot of square feet for my dollar, I can immediately cross off the pricier homes.
What I find more annoying than other inaccurate information is a listing that has been sold but has not been removed. It is an understandable problem because we all get busy or lose track of all the places where we have listed properties. All the same, it wastes time.
Thanks for your question.
PML of Longmont, CO
720 810 0683
Unlike Scott below, I like to start my assessment of a home's value by comparing its price per square foot to other similar homes in the same area because it is the only completely objective comparison that one can make. I also look at price per finished square foot and often price per above ground square foot. HOWEVER, though the numbers are usually very revealing, it is important to note that the numbers represent just a starting point. Lot size, finishes, condition, upgrades, layout, garage size, construction issues and location within the area are all important. For example, a home that backs to a noisy, busy road will not be worth as much as a similar home surrounded by quiet streets. Please let me know if you have any questions.
Prudential Real Estate of the Rockies
You are correct and when an appraisal is done there will be a different price per sq ft for finished above grade vs below grade and even another price for unfinished basement. I can't believe that people are allowed to advertise like this and unfortunately there is not much you can do but sort through it. It is similar marketing to groceries (20% more free) or car dealership (only $199 per month) - they are just trying to get you in the door.
As an agent, we have access to all of the data and can sort through it much easier than home buyers.
Asking price per square foot isn't something to get all worked up about since asking prices are "pie in the sky" and are only a reflection of what the seller would like to get for their home.
Price per square foot should be viewed as a tool that can assist the buyer in determining if they are paying too much for the home, are getting a great deal, or they are somewhere in between. Our recommendation is to reseach your target location and become the expert on that market. By doing so you will be able to use this information to help you identify possible options as well as those that can be cast aside because the seller and their agent are not in touch with reality.
Get with a good Buyer's Agent who can help you to assimilate all of the data available to come up with a valid expectation of value, then you can make a great offer on your next home.
Best of luck!
You are absolutely correct that appraisers do not use the same price per square foot for 'below grade' space. So that advertisement is not at all a formula that will be used for any type of registered appraisal process. (disclosure - I am not a licensed appraiser)
There are a lot of real estate agents who do not understand exactly how that works and put those types of statements on advertising.
As a side point - in your home searches, it would also be advisable to make sure you and your buyers agent always check to make sure any finished basements were permitted if they are being advertised as finished square footage. There is a lot of controversy over the way that is or is not advertised.
Bottom line - try to get a search link to the MLS from a local realtor that can help you sort through this type of information. Make sure they are working as a buyer's agent so they will be out for your best interests (no that is not a given and you have to make sure of that detail as well.)
Keep asking questions and comparing information and build a team of professionals to help you every step of the way. These will include a buyer's agent, a mortgage broker (and thus an appraiser ) a surveyor perhaps and a real estate attorney in case you decide to have them review any of your documents.
Remember, buying a house is one of the most stressful things you do in your life - it's much nicer when this decision is behind you and you're sitting on your porch enjoying a glass of lemonade!
Neuhaus Real Estate, Inc.
There are, however, instances where a house across the street can go on the market for substantially more than another listing. If that house is lakefront property and has a landing for boats, the seller justifiably can expect to sell his/her house for considerably more than a property that is merely near the water.
Without an address, I can't really remark on whether Lori is right or wrong for the current market.
I have seen homes that were scrapers in Boulder sell for a reported $600.00 a square foot. $600,000 for a 1000 square foot scraper under the Flatirons. Denver MLS (Metrolist) calculates based on above ground square footage.
In the case of a tril-level the square footage is calculated the same way. A two story costs less than a ranch style to build. I REALLY WOULD LIKE TO SEE MORE KNOWLEDGE GIVEN ON THE HAZARD INSURANCE INDUSTRY COST TO REPRODUCE CALCULATIONS. If we as an industry start making this insurance inforamtion available, then perhaps the Buying public may be less puzzled about the real value of square footage.,
I have had discussions with appraisers who have indicated in our current market, basement/below ground square footage is calculated at between $15-$20 per sq. ft. some additional credit for high end finishes and walk-out basements can be made as well.
Hope this helps.