Calculating Home Values
Our neighbor’s house is for sale. Because I was curious, I looked up what they have the list price set at online. It’s a 2800 square foot beautiful old farmhouse located on a little over an acre. I have been in love with this house since we moved here. Well, the price is now low enough that we could realistically buy this house and be able to afford it. They’ve got it listed at about $70,000 than I thought they would list it for. I almost threw up when I saw that. I think they have listed the house at a much lower price than what it is worth. I do know they are extremely motivated to sell.
I’ve thought about us buying that house and moving next door. How convenient would that be?! We’d have a little more property, a much bigger garden, and a garage. However, with the age and size of the house, I’ll bet the utilities on it would scare the pants off me. Plus, we really don’t need 2800 square feet. That would be a little extravagant.
What really worries me is that our house value is going to drop as a result of how much their house sells for. I calculated the price per square foot, which comes out about $85.68 a square foot. If I multiply that by 1500 (approximately the size of our house) that comes out to $128,517. OUCH. When we had the realtor out a few months ago, he thought that we’d probably come out the net proceeds around what we paid for the house. That I would be okay with. $128,000, however, I would not. That’s a lot less than what we paid for it.
I don’t know if I am worrying unnecessarily or I am being realistic. I can’t see how our house value would drop that much in few months, especially in the area we live in. I don’t know if I should worry about it or not. When calculating home values, surely they would not just factor in the price per square foot in our area. They would also go by other homes similar to ours that have sold in the last few months or so, right?
I think it’s really unfortunate they are selling their house at all because we really liked them as neighbors, but I’m even more concerned that we will loose our butts when we try to sell our house. I’m hoping that’s not the case. 🙂
What do you think- should I be calculating our home’s value based on the house next door? Or is it like comparing apples to oranges?