Where readers ask and we (the community) try to answer:
There is a new listing in my building, which if it sells will be a good comp for my condo. I like the price they are asking, and if it sells anywhere near that, I would be happy because my unit is a better one. Problem is that the area is wildly inaccurate, on the high side, which drives down the price per foot. So in the future will the comp be referred to on strictly price basis, or a price per foot basis? How do you call BS on a listing without interfering with a transaction? What do you do when you are looking at a listing that obviously overstates the area?
Damn good question. As for calling BS, that’s easy, tell us which property and we’ll throw it up on the site, take the heat (like always), and likely be asked by either the Realtor or Broker with the listing to pull it down.
When we do comps, we don’t just look at price per square foot. Some do, we don’t. Price per square foot is not the be-all-end-all. Price and amenities are much more important (at least to us). In San Francisco there are too many individual characteristics of each property to take into consideration than to simply look at price per square foot. Generally a higher sales price would help your unit if your unit is more desirable, especially if the unit is in the exact same building as this appears to be.
As for overstating an area, we have to first ask, was your statement “the area is widely inaccurate” stated correctly? Not quite following that. Generally, if it’s over-priced, it will not sell, and that will be bad for everyone in the building and possibly even the entire area. Give us a little clarification on that statement and we might be able to elaborate.
Thanks for reading, and thanks for writing in.
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3 thoughts on “When Making Comps, is Price, or Price Per Square Foot King?”
Alex, What was the outcome from a couple weeks ago where both the agent and seller were jerks? It seems as though that post was removed from your site, what’s the back story?
I had to pull it per request from my clients involved in the transaction. We’re still working on it. When all is said and done, I’ll update everyone (with my clients’ permission, of course).
These questions from readers always crack me up. Obviously psf is only one factor. And if this guy things the comp is great for his condo than it’s probably overpriced. Condo prices are strongly influenced by psf but there are other factors like proximity to elevator, floor, quality of finishes, views (good & bad) and several other things that will impact the value. Best to go take lots of pics AND measurements of the current place and document why you place is better. So when you go to market you can accurately reflect the comp and generate a true PSF.
And if you see an agent trumping up the sqft and can prove it otherwise — send it to Alex, and/or call the listing agents Office and speak to the manager.
Someone correct me if I’m wrong, but it is a liability to falsely overstate the sqft and can cost the agent/broker dearly if a buyer contests it. I’m sure the appropriate disclaimer is in the disclosure statement.