Go back to the Real Estate Glossary
What is Square Footage?
The size of a lot, the floor space of a building, or any other piece of real estate or property is measured in square feet or area. It is calculated by multiplying the length of the structure or land being measured by the breadth of the structure or land.
Square footage is a measurement that is used to determine the size of any room, floor, or piece of land. It isn’t as precise as other measurements (such as Total Floor Area), but it gives home buyers and sellers an indication of how much the cost per square foot is for that specific property.
How is it used in real estate?
Understanding the square footage makes it easier to compare properties with similar values in similar neighbourhoods.
Simply multiply the length of the space by the width to get the square feet of a rectangle or square room. So, if a room is 8 feet long and 9 feet wide, simply multiply 8 by 9 to get 72 square feet.
Cost per Square Foot
The cost per square foot of an area of a house, condo, townhouse or other buildings is calculated using the price or cost per square foot method.
It’s a simple yet effective formula that’s typically used to compare similar real estate in a neighbourhood or similar type of property. The price per square foot can be computed using either the listing or the selling price.
For home builders, it helps determine the appropriate amount of parts and materials to order from vendors in order to calculate the overall cost of building a home.
Example
Sander is on the lookout for a new house and has been browsing online for properties that suit his budget. He’s specifically looking for a home with a lot of living space, so he’s paying close attention to the square footage listed for each property he comes across.
One day, Sander finds a property he’s interested in and reaches out to the listing agent to schedule a viewing. During the viewing, he takes note of the square footage of the property and compares it to the other homes he’s viewed.
Sander is also curious about the cost per square foot of the property, so he asks the listing agent to explain it to him in more detail. The real estate agent tells him that the cost per square foot is determined by dividing the total sale price of the property by its square footage. This helps buyers understand how much they’re paying per square foot of living space.
With this newfound knowledge, Sander decides to do some calculations of his own to compare the cost per square foot of this property to others he’s viewed.
