Whether you’re a seasoned investor or just a buyer in search of a home with great value, your secret weapon should be the Price Per Square Foot (PPSF) metric. Learning how to sort properties by PPSF can save you a significant amount of time and instantly identify homes that offer better financial value.

How the Price Per Square Foot Method Works

PPSF gives you an apples-to-apples comparison of homes, regardless of their size. It reveals which listings are genuinely undervalued compared to their peers.

The Simple Steps:

  1. Request Local Data: Ask your realtor for the average price per square foot for recent sales in your local market. Make sure this data is specific to the type of home (e.g., single-family vs. condo) and number of bedrooms you’re interested in.
  2. Compare Listings: Compare the PPSF of currently active listings against that market average. Any property listed significantly below the average is worth a closer look.

For example, I recently helped a client streamline their search by filtering based on PPSF, and we quickly identified homes that offered superior value, saving them weeks of searching.

The Hidden Factors PPSF Doesn’t Show

While PPSF is an effective screening tool, remember that it’s just the first step. It doesn’t tell the full story, and that’s where an expert’s opinion is invaluable.

Be sure to account for critical additional costs and details:

  • Renovations and Repairs: A low PPSF often indicates the need for significant work. You must factor in the cost of a new roof, HVAC, or kitchen updates.
  • Terms and Condition: The property’s overall condition, the seller’s motivation, and the specific terms of the sale all impact the final deal’s value.

An expert realtor can help you evaluate these factors to ensure you’re truly getting the best deal possible, not just the cheapest one on paper.