Value vs Price per Square Foot
When buying a new home, we are all interested in a key question: “What’s the price per square foot?” However, there are a lot of other metrics you can use to find the perfect builder and home for your family.
Today, we’ll be exploring the difference between value and price per foot to make comparison shopping easier for you when building a new home on your land.
What is the Difference Between Price and Value?
Because home prices and buildings costs can differ significantly from state to state and city to city, price per square isn’t always the most reliable metric for comparing costs.
Price per square is most dependable when assessing homes in the same geographic location, around the same size, built with similar finishes, etc. Within a given geographic market, buyers tend to lean on price per square foot to guide their buying or building decision.
However, value per square foot tends to be a more accurate metric for evaluating the cost and value of your home. Many home buyers and builders don’t use this because it can be difficult to calculate without the expertise of a home builder.
How Can I Get an Accurate Price per Square Foot?
A home builder can only give you an accurate price per square foot when they know the specific features and finishes of your future home. More often than not, they will provide you with their lowest price per square foot.
How Do You Calculate the Price per Square Foot?
The price per square foot is calculated by dividing the total house cost by square footage. Larger homes and homes with more than one story will typically have a lower price per square foot than smaller, single-story homes.
This is due to the fact that a two-story home has a more compact footprint, requiring less concrete for the foundation. Additionally, it minimizes the roofing materials needed, unlike a sprawling single-level home with the same exact square footage.
How Do You Determine the Value per Square Foot?
Determining the value per square foot is a much more accurate way to compare home pricing. When you look at value per square foot, you are accessing not only the home price but what value the home builder offers.
Ask the builder if you will have dedicated, supportive company employees that will assure your home is built to spec and on time. Another question to ask is if you’ll have to perform duties (or sweat equity) yourself, such as interior and exterior painting or excavating as part of your owner’s to-do list.
Not all homes are created equal, so it’s essential to understand what’s included in the home price and what isn’t.
Looking at the breakdown of a builder’s inclusive features will help you understand if you’re receiving the best price or the best value.
Get an Instant Quote for the Cost of Your New Home
Now that you know the difference between value per square foot and price per square foot, you are ready to compare home prices.
An excellent place to start is Simplicity’s Instant Quote Tool, where you will receive transparent, online pricing. It’s directly tied to our in-house estimation software, providing accurate, up-to-date, and detailed pricing.