Just As I Thought

Bite-sized pieces add up to a larger meal

I wonder how most people quantify the cost of real estate — is it an analytical thing, or do they do it by gut feeling, by emotion?
I think I go by emotion, but there is a tipping point where my feeling about a house doesn’t justify the cost.
There is a house on the next street over which has been on the market for a while. It was originally listed at $675,000, now it has been reduced to $669,500. Outwardly, it doesn’t seem any bigger than my house, but in fact it has three bedrooms and two baths instead of my two br/one bath, and 1,028 square feet to my 830. Still, it looks far too small for that price. When priced by square foot, it comes to $651/sf. (My townhouse in Arlington was exactly the same square footage, but had only two bedrooms so I’m afraid that three bedrooms must be very tiny. I sold that place for $416/sf.)
Here’s the surprising part: even though I paid significantly less for my house on the next street — more than $100,000 less — I paid far more per square foot: $674/sf, to be exact.
Like anything broken down into smaller chunks, the higher-priced house is easier to digest: more space, more bedrooms, smaller price. Until you add the chunks together. Like buying something for three easy payments of $49.99 until you realize that you’ve bought a $90 appliance for $150.

1 comment

  • The price per square foot almost works but not really. There are too many other factors that effect price that are not part of the sq ft. things like a view, a garage, fenced yard, hardwood floors and such make a big difference in price but are not part of the sq footage. Even the layout of the rooms themselves, because I’ve seen 1,100 sq ft homes laid out poorly where my 850 sq ft house was very well laid out.

    I’m more than willing to pay a higher per sq ft cost for a smaller nicer home (like yours) than I am for a larger home that has more sq feet but little else to offer.

    Ask any agent and they’ll tell you buying a home is an emotional purchase. Buyers rarely use facts. Oh sure they ask about them but the purchase is made on emotion not facts.

    It is often said if you can sell the husband on the garage and the wife on the kitchen the sale is made. That may seem sexist and out of date but I can assure you its still the motto of agents all over this country.

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