There are several keys to determining home values. Of course the old real estate adage, "location, location, location" is the most common in the real estate world. Many homeowners think that the size of the home is the next most important factor to use. People think a home with more square footage is always more valuable. It's important to take into consideration other factors such as the number of bedrooms in a home.
When using square footage to determine the price of a home, be sure you are using what's comparable in your area. Sometimes an assessor's office or a multiple listing service will only use square footage that's above ground in their analyses. They won't include the square footage of a basement if a home has one. However, sometimes they will include basement square footage in the total square footage of a home. You want to make sure you are comparing apples to apples. Often times public records will list total square footage and then list the square footage on the different levels of a house. They will list main floor square footage, second story square footage, basement square footage and so on.
It's also advisable to look at the annual property taxes on a home. Sometimes a house that has a few hundred extra square feet, but has similar property taxes, won't necessarily mean it's worth more. Be sure to use homes in the same neighborhood, or one in close proximity, when determining price. A home with considerably more square footage will definitely be worth more. However, there are other factors to look at as well. The number of bedrooms in a home is one of these factors.
Number of Bedrooms
Many times, there is more emphasis on the number of bedrooms in a house than the square footage of a comparably built house. Homes with more bedrooms often have higher home values. This is especially true when comparing a home with three of four bedrooms. For example, a 2,000 square foot home with three bedrooms may not be worth more than an 1,850 square foot home with four bedrooms. Some homeowners may put more value in a home with four bedrooms if they really need those four bedrooms.
It's also important to look at the size of the bedrooms in a home. A bedroom may be so small that it won't actually work as a bedroom. It may have to be used as a small office or den. If that's the case, that four-bedroom home may not be worth as much as a home with three good-sized bedrooms and a little more square feet. It's also important to look at the total room count in a home and other amenities the home offers.
Other Rooms and Amenities
The other rooms in a home and the home's amenities are also key factors in determining a home's price. Bathrooms are definitely a consideration. In most cases a home with two full bathrooms will be worth more than a home with a bath and a half, for example. Nowadays, many people are looking for a first-floor office because they are working from home. A home that has a separate kitchen, living room, dining room and family room may be more valuable to a family than a home that just has a kitchen and a great room, depending on their lifestyle and taste. Homes with amenities such as a fireplace, a deck and certain upgraded amenities will also add incremental home value.