Estimating Price Without Comparable Comps

By: Lori Turturici
Submitted: 08:01PM on Sunday 06 December 2009

When you are having a difficult time assessing the proper pricing of a certain property because of the lack of comparable pricing in this area, your best tool will be using SQUARE FOOTAGE COMPS.

Here is a quick and simple tool to assist you with this process:

How to Use Square Foot Pricing
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Some neighborhoods are a mixed bag of architecture, style and size, which means if you can't find another home similar to the one that you are pricing, you can use square foot pricing.

How?

Take 3 - 5 homes as similar to yours as possible, add up the square footage and divide by the number of homes. This will give you an average per square foot for your comps. T

Then, add up the sold price of each home, divide by the number of homes to get the average.

Lastly, divide the average sold price by the average square foot to get the average price per square foot.

Once you have the average price per square foot, multiply it by your home's square footage.

Step 1: Find the average sq. ft. of comps
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Home 1: 1,950 square feet
Home 2: 2,400 square feet
Home 3: 1,800 square feet
Home 4: 2,050 square feet

Total: 8,200 square feet

8,200 / 4 = 2,050 sq. ft.
2,050 is the average sq. ft. of your comps

Step 2: Find the average price of comps
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Home 1: $310,000
Home 2: $410,000
Home 3: $299,000
Home 4: $325,000

Total: $1,344,000

$1,344,000 / 4 = $336,000
$336,000 is the average price of your comps

Step 3: Divide the average price by the average sq. ft.:
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$336,000 / 2,050 = $164/per sq. ft.
$164 is the average price per sq. ft. of your comps

Step 4: Set the price of your home:
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Take $164 and multiply it by your square footage to get a price.

For example, if you have a 1,975-square-foot home, multiply it by $164 (e.g., 1,975 sq. ft. x $164 = $323,900).
The price of the home is : $323,900!