Appraisal Fundamentals
Why Price Per Square Foot Isn't an Appraisal
A popular shortcut that misses far more about a home's value than it captures.
Multiplying a neighborhood's average price per square foot by your home's size feels intuitive — but it skips over almost everything that actually drives value beyond raw size.
What This Shortcut Misses
It Ignores Condition & Quality
Two homes with identical square footage can have very different values if one has been fully renovated and the other has original 1970s finishes.
It Ignores Location Nuance
A dollar-per-square-foot figure from one neighborhood, or even one street, often doesn't transfer cleanly to another — even within the same city.
It Ignores Diminishing Returns
Larger homes frequently sell for a lower price per square foot than smaller homes of similar quality, since buyers pay a premium for the first square feet of space more than the marginal ones.
What an Appraisal Does Instead
Rather than applying one flat rate to every home, an appraiser selects genuinely comparable sales and derives specific, market-supported adjustments for the differences that actually exist — size among them, but also condition, quality, age, location, and site characteristics. See the Sales Comparison Approach for the full process.
What This Does Not Mean
It doesn't mean size is unimportant — GLA is one of the most heavily weighted adjustment categories in most analyses. It means size alone, expressed as a flat rate, isn't a reliable stand-in for the full comparable-sales process — the same reason automated online estimates differ from a licensed appraisal.
Frequently Asked Questions
Provided for general educational purposes based on standard Sales Comparison Approach methodology. Last reviewed: August 2026.