Learn calculate the price you should pay for a home.
If you're in the market to buy a home, you'll want to calculate the purchase price of the property you're interested in buying. While the listing price of the home is an indicator of how much the home will sell for, you can do some quick calculations to estimate the purchase price you should pay based on the estimated market value of the home.
Instructions
1. Gather three sources of data: local real estate agents, local real estate magazines and the real estate section of the local newspaper. You can choose to use one of the three sources or some combination of the three sources for your research.
2. Locate comparable homes using the sources of data. Identify homes that are in the same area and have similar square footage and amenities to the home you're interested in purchasing.
3. Determine the price per square foot by dividing the sales price of each comparable home by its square footage. For example, if the sales price is $100,000 for a 1,000-square-foot home, then the price is $100 a square foot.
4. Calculate the estimated purchase price. Multiply the square footage of the home you're interested in purchasing by the price per square foot. For example, if the home you're looking to buy has 1,100 square feet, multiply $100 by 1,100 square feet to calculate an estimated purchase price of $110,000.
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