Understanding Why Comps Are So Cheap On A Sf Basis

[Louis Hemmi]

As an appraiser, I don't value properties at price per SF the way RE agents do. Differences in SF from one house to another is considered contributory value, and sometimes that value is high, other times low, other times the market does not recognize it.

It also could be the case that construction quality of upgrades vary between the houses which can skew prices per sf...a buyer may pay a lot more for an upgraded/remodeled 3500 sf house than they would an avg condition 3800 sf house.
After you research the comps and see interior MLS photos and attributes of each compared to subject it will become clearer and some of the houses you now see as potential comps may be eliminated. Unless a market is totally random ( which it seldom is), buyers pay prices for a reason. So how your subject compares in location, quality and upgrades to the sales will usually narrow down the comps to those truly more similar to subject which makes adjusting easier.

One thing that might be throwing prices off if you see similar upgrades is if some sales are flip sales , and then you have to see if buyers over paid for them or not

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You are so right! My subject (3400 SF) was the model home, and has $25,000 worth of upgrades, including nice high ceilings in all bedrooms (not just the master, which has a coffered ceiling). What threw me is that the 3800 SF comp looks the same as the subject, maybe a bit better because they have wood instead of ceramic tile in the living room. The comp also has stainless steel appliances whereas the subject does not.

So, with a quick glance, the 3800 SF would appear to be underpriced by about $10,000. The upgrades to the subject include the high ceilings, rounded sheetrock corners, creches. I think the extra tall ceilings (definitely not slanted enough to violate the 5-ft rule) and trim/finish options outweigh a living room floor of wood and the stainless appliances. As a matter of taste, the ceramic tile of the comp is not as attractive as the subject, but that's not adjustable.

Thanks for your response