There is more to Price per Square foot that meets the eye.

Today’s housing market has been driven by price and price per square foot.  Every builderhome seller and listing agent worries about what their house is listed for and what the price per square foot is, compared to other homes in the area.  Even buyer’s agents are educating their clients that Price per Square foot is the way to compare one home to another.  In both cases, that is all we are looking at when it comes to costs.  Well, there is more to Price per Square foot then meets the eye.

Are there two snow flakes that are exactly the same?  Am I made the same as someone else out there that is the same size and weight?  I bet not. So why do  we compare homes to price per square foot? I will tell you why. it is all about costs.  We have been trained to want the Mac daddy but only pay the WalMart price.

Let me explain.  Lets go car shopping for a minute.  Lets say you are looking at a Toyota Avalon and a Lexus ES or LS.  (you could even say a BMW since they are smaller).  The first thing we think about is what I want in my new car.  I want everything I possible can afford and then some.  I want the ipod hook up, nav, leather seats that cool your bottom, the smooth ride and interior details that make you feel comfortable, safe and secure. What we don’t look at in a car is the price per square foot.

The interior Volume(cu.ft.)  for the Avalon is 106.8, for the Lexus ES is 95.4 and the LS is not listed but lets say it is near the same as the Avalon.  The cost per square foot (or cu. ft in this case) would be the following:

Avalon:  $310.90 the ES $377.88 and the Lexus LS would be $653.37.

A big difference between these cars.  And they all get you to point A to point B the same way.  Some might say that the Avalon is a better car compared to the other two for the value and price, I wouldn’t argue with that, but even though they might be close in size they are not created equal.  The ES is smaller than the Avalon but priced higher.  The LS is closer in size to the Avalon but is priced $36,575 MORE.  Just for 1 car.  And for $575 more you can purchase the Avalon and the ES and get two cars for the price of 1 LS.

This example could work both ways.  Why would I buy a Lexus when the Toyota is similar, minus a few options.  But then again those options might make the car and my driving experience a little better.  Well just remember that your driving experience just lost the greatest amount of it value when you drove it off the lot.  And unlike a home you will NEVER get it back.

So the next time you go home shopping don’t just look the size of the home but look at all the parts of the home that make up the sum.  Value is created by the options in the home.

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