Module 5
7-Step Process

Step 3: Calculate Price Per Square Foot

Convert each comp's sold price into a price-per-sqft metric for easier comparison and analysis.

The Formula

Price Per Sqft = Sold Price ÷ Square Footage

Example: $250,000 ÷ 1,800 sqft = $138.89/sqft

Example Comp Analysis

Comp Sold Price Sqft $/Sqft Condition
123 Oak St $245,000 1,650 $148.48 Renovated
456 Elm Ave $232,000 1,720 $134.88 Renovated
789 Pine Dr $255,000 1,800 $141.67 Renovated
Average $/Sqft: $141.68

Why Price Per Sqft Matters

  • Normalizes comparisons: A $300K 2,000 sqft home and $250K 1,600 sqft home may have same $/sqft
  • Identifies outliers: If one comp is $180/sqft and others are $140/sqft, investigate why
  • Quick ARV estimate: Subject sqft × neighborhood $/sqft = rough ARV

Important Note

Price per sqft varies GREATLY by condition. A renovated home might be $150/sqft while an as-is home is $90/sqft in the same neighborhood. Always compare like-to-like conditions.

Module 5
7-Step Process

Step 3: Calculate Price Per Square Foot

Convert each comp's sale price to a price-per-square-foot to normalize the data for comparison.

The Formula

Price Per Sqft = Sale Price ÷ Square Footage

Example Calculation

Comp Sale Price Sqft $/Sqft
123 Main St $245,000 1,650 $148.48
456 Oak Ave $268,000 1,720 $155.81
789 Pine Rd $232,000 1,580 $146.84
Average $150.38/sqft

Typical $/Sqft by Market

San Antonio

$120-180

Varies by ZIP

Atlanta Metro

$140-220

Higher in ITP

Nashville

$200-300

Hot market

Key Takeaway

Price per sqft normalizes different-sized properties for comparison. A $300K 2000sqft house ($150/sqft) is comparable to a $225K 1500sqft house ($150/sqft) - they're in the same range.