• October 30, 2016

Home Value: How to Find Out What Makes it Worth More (Or Less)

Home Value: How to Find Out What Makes it Worth More (Or Less)

Have you ever felt confused about the value of your home? What about its true size? If you think you might be buying or selling in the future, it’s important to have an understanding of how square footage is determined and what factors could change the technical size and/or value of a home. Below, Tampa real estate expert, Joe Lewkowicz breaks down the complex topic of square footage.

My house is 2,200 sq. ft., what is it worth?

This simple question warrants a somewhat complicated answer. First, “sq.ft.” needs to be defined. Total square feet is under the roof and will include the garage and porches or lanai areas. When comparing homes, square footage is defined as the heated or air conditioned living space. If a porch or lanai has been enclosed this could be considered part of the air conditioned living area. This may not show up on the tax rolls if a permit was not pulled for the work done or the permit was not finalized. Bonus rooms built over a garage will usually appear in the living area square footage.

In the example the total square footage is about 2800 sq. ft. The living area is 2,078 sq. ft.. The FOP part is a porch, but this has been enclosed without a permit. If it enhances a home, it may be valued the same as the other part of the house which would make the living area almost 2,300 sq. ft., but it may still be considered a porch area by an appraiser.

Living square footage is not all valued the same. For example, in one neighborhood, a house that had 4 bedrooms, 3 baths and 2,870 sq. ft of actual living area sold for $412,000. It had no changes to the original home and did not have a bonus room. The sale price is $143.55 per sq. ft. Three similar homes to this one sold in the same time frame but all had a bonus room. They each sold at prices between $400,000 and $465,000. The price per sq. ft. ranged from $113/ft to $132/ft. All of the homes were lower in price per foot than the home without the bonus room. In this case the bonus room is not valued the same as the rest of the home.

Most appraisers use a value of $40-60 per sq. ft. for the size difference of a property. Using the example above, in comparing one 3,200 sq. ft home that includes a bonus room to the one at 2,870 sq. ft. without a bonus room, the value difference might be 3,200-2,870=330 sq. ft. x $40/ft. or a $13,200 difference in price if there are no other factors in the valuation. The house with the bonus room that is larger should sell for $412,000+$13,200 or $425,200. This works out to be $132.87 per sq. ft. total. The same valuation process will apply to porches or garages that have been enclosed and in some cases they may be a negative in the sale if the extra size does not enhance the original floor plan.

There are, of course, other factors that will make a difference in the sale price of a home. These include numbers of baths, how large a garage, lot size and location. These will be discussed in future blogs.

Remember, no-one works harder to sell your home! For questions related to square footage, bonus rooms, or anything that might change the value of your home, use the free resources at https://josephlewkowicz.com/ or contact me today at 813-908-7293.