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Tips for determining home’s market value

How useful is price per square foot in assessing value?
Published on Jul 18, 2005

Wouldn't it be nice to have an easy way to find out how much the home you want to buy or sell is worth? Some consider price per square foot to be a valid way to determine market value. The price per square foot is arrived at by dividing the sale price or estimated value by the number of square feet. In theory, by using the price-per-square-foot approach, you could easily determine what price to pay for a listing. All you would have to do is find out the price per square foot for a number of properties that recently sold in the neighborhood that are similar to one that you're interested in buying. Then average these figures and multiple the average price per square foot by the number of square feet in the home you want to buy. Or, if you were selling, you could determine how much your home ought to sell for by finding out how much buyers paid on a price per square foot basis for homes similar to yours. There are shortcomings to this approach. In areas where there is extreme variabil...

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