A friend’s hunting for a condo as we speak. He sent me photos and details of the unit he’s looking at, asking for my opinion on whether the list price is good value or not. I gave him the average price per square foot in that neighborhood for the type of condo he’s looking at. And a piece of advice: Get a tape measure.
Best Way To Compare Different Properties
The price per square foot is an excellent way to compare different properties. Take the list price, divide it by the number of square feet, and you’ve got your price per square foot. You (or your real estate agent) should have a pretty good ballpark idea of the price per square foot for the area you’re buying in. But you need to measure those square feet yourself.
If there’s one thing I’ve learned over the years, it’s how inventive some sellers get with their square footage. When you’re buying a 1,000-squre-foot condo you might expect to get 1,000 square feet. But you need to ask how the seller calculated the size of the property. And check it yourself.
Checking Square Footage Of Properties
Sometimes a bad layout or poor lighting can make a unit look small and cramped. In Latin America, there’s a tendency to try and squeeze in as many bedrooms and bathrooms as possible into what seems like a tiny floor space. That can also make the unit feel smaller than it really is.
But sometimes the 1,000 square feet you’re expecting simply isn’t there. Sellers often guesstimate the size of their property. Their math may not be up to scratch. Or they’re just plain trying to get top dollar by jacking up the floor space.
And rules vary from country to country on what’s included. Some markets count all outside space, even an uncovered patio. The square footage may include balconies, storage space or a garage. Some countries add in a share of common space, hallways and entryways. I’ve even heard of situations where a seller included the square feet occupied by the unit’s parking space.
Some countries calculate the interior space from the outside wall. Clearly, it’s not livable space; it simply pads out the total square footage.
Why Knowing Square Footage Is Important?
You may ask why you’d need to know exactly how many square feet you’re getting. Let’s look at a location where the average price per square foot is $150. A seller is asking $150,000 for his 1,000-square-foot condo. But when you measure it, you discover it’s only got 850 square feet. At $150 per square foot, that’s $127,500, rather than the $150,000 the seller expects.
When you’re buying, you need an accurate yardstick of the properties you’re looking at. Price per square foot is the best one. But you need to compare apples with apples. You need to know that the two 1,000-square-foot condos you’re sizing up both have 1,000 square feet—or comparing them is meaningless.
What’s counted or not counted as part of the floor space doesn’t matter, so long as both properties were calculated the same way.
This also applies with land. You normally pay per acre or hectare. And it’s important you get what you’re paying for.
Large land parcels sometimes stay in the same family for generations. The title deed may refer to landmarks that no longer exist. The family may have sold some of the land over the years and not have a very accurate picture of the boundaries or how much land is left. They’ll tell you they’ve got 200 acres when in reality they’ve only got 100-odd acres left. Pay them the 200-acre price they’re asking, and you’re out of pocket from the get-go.
So, ask how many square feet or acres you’re paying for. Ask how the measurements were calculated. And then measure it yourself before you make an offer.
The next step is getting an accurate survey.The survey will fix the boundaries and determine exactly how much land there is. That way, you pay market value based on what’s there, not an inflated price.
Doing a little extra homework when you’re buying could mean the difference between a healthy profit—or a disappointing loss—later on, when it comes to selling or renting the property.