Question

A real estate agent is performing a comparative market analysis of a property. One of the best comparables has a nearly identical square footage. If the comparable has 65,500 square feet of footage area and is valued at $478,000, what is the comparable's price per square footage.

(Property Value of Comparable / Square Footage of Comparable = Price per Square Foot of Comparable)

Answer 1

The price per square foot of the comparable property is approximately $7.30.

Step-by-step explanation:

• To calculate the price per square foot of the comparable property, divide the property value by its square footage: $478,000 / 65,500 sq ft = approximately $7.30 per square foot. This metric is crucial in comparative market analysis as it helps gauge the relative value of the subject property against similar properties in the area. In real estate, comparing prices per square foot among properties with similar characteristics aids in determining fair market value.
• It allows for a more accurate estimation of the subject property's worth based on its size compared to others in the vicinity. Factors like location, amenities, and condition should also be considered alongside the price per square foot to make a comprehensive assessment.
• For potential buyers or sellers, understanding this metric helps in making informed decisions about property values, ensuring fair deals and reasonable negotiations based on the property's size and comparable values in the market.