Obligations & Square Footage

[Tim Hicks (Texas)]

I know we are only obligated to the lenders. However, when you inspect a property and the square footage is overstated by the listing agent, shouldn't somebody alert the buyer that the home is not a big as stated? The loan officer is not going to do it, because they do not want their loan to go south. EX. I inspected property today listed at $169,900, dropped from $192,500 where the listing states the SF as 3,500 SF. The tax records say 3,208 SF. The listing says "tax office SF is wrong. The game room is not included." Well, yes it is. In fact, I came up just shy of 3,200 SF with the game room. The problem is not a value problem. The property is still worth more than the contract price of $164,000, just not as much as the borrowers think. They think they are "stealing" a 3,500 SF home when in fact they are paying nearly market value for a 3,200 SF home. Two years down the road, when they go to sell they are going to find out that they did not buy what they thought they were buying. Who do you think they are going to blame? I informed the loan officer, but I could tell by her resonse that they did not want to disclose the facts because they did not want the borrower to back out and lose the loan. What do you think? No, I am not going to call the borower. My heart tells me I should, but my ethics tells me I can't. Our business just doesn't make sense sometimes.

 

[Mountain Man]

Saw a similar deal several years ago in my old home town, caused a big, messy lawsuit. The buyer was able to prove to the court that their sales price was based on a per square foot GLA analysis..... GLA provided by the agent. Buyer won big $$$$, agent and broker lost their axxes. Now the MLS does not list GLA. I guess they don’t know how to read the tax cards. :roll:

 

[George W Dodd]

The incorrect stating of GLA is a common occurance in this market. Experience has caused me to base GLA on personal measurements and/or public records, UNLESS there is sufficient evidence to convince me otherwise. And then I note the difference in the report so someone comming behind me can understand where the difference came from.

In my opinion, I would notify both the selling and listing agents, in writing, what your inspection determined. That puts the burden where it belongs back on the agents.

Just my thoughts.

 

[Pamela Crowley (Florida)]

Good answer, George!

 

[Joe Birrell (NY)]

Somebody should alert them to Article 1 (1-3) in Realtors Code of Ethics -
"Thou shalt not mislead people" (my own paraphrasing).

We have an MLS with +-3000 listings at any given moment - THERE IS NOT ONE LISTING THAT IS ACCURATE !! So, ok maybe there is at least one accurate listing, but I havn't found it yet.

 

[Blue1]

I have talked to numerous Realtors in my area and most of them do not measure the house they're listing. One told me because of liability. My policy is that if I come up with a significant difference in GLA from what the listing states, I alert my client and tell them I'd like to re-measure with the Realtor there. If I'm wrong, no charge for the second trip.......In my County, the Assessor does not give out improvement information so it's important to take accurate measurments.

 

[Ross (CO)]

Yes, Tim , sometimes the tightness of the client relationship does suck, and yet ....we were not invited to extend our services and help everybody involved. At some point buyer-beware takes over and the world continues to turn. Measuring and representing a home's size is critical and I'd bet very few list agents in my city get out there and do it ! There is far too much reliance on reference to county assessor records. I do not write-up listings nor sell homes but I believe there is an escape clause one can place in a listing to the effect of ...."measurements approximate, obtained from county records" which means that all obligations are thrown onto those records and the unspoken line would be...."if you find any problem with sizes here, speak to the assessor" ! Three and half years ago I did appraisal of 5-level place built on a major slope. I discovered 480 sf LESS than the guy thought he bought 2 years earlier, so obviously my value reflected the appropriate total area. He crapped bricks and few weeks later sent a formal letter of complaint to State. Claimed I was in error (I even went back to house two days after original visit to ask to re-measure --- so I'd be certain ! ). The county records and the MLS listing from time of his purchase showed absolutely identical areas for each of the 5 levels. (House was built an entire decade before then ) Even the appraiser who supported that purchase was quite close to those numbers but at least not the same. Finally, after a 6-month wait, the State's investigator had come down and he measured. I was right and the other three entities, four if you count the homeowner, were incorrect. I have been curious to know all this time just how much the h/o scored in the likely lawsuit he (could have) pushed. Although absolved of all fault our State still is obligated to "keep" record of the complaint because they had to expend state funds to investigate.

 

[Terrel L. Shields]

We had a meeting of the minds at our last NAR section meeting with 6-7 MLS reps (one is an appraiser) and discussed was the SF. Most Realtors accept what the seller says is the SF, liability reasons, pure and simple. One Realtor even commented that he would use what the seller said over what the tax card said or his own measurements.

I get the impression some appraisers there expected the Realtors to do our job...bitterly griping about the SF. So what? I don't pay any attention to what the listing says about anything. Who hasn't seen a listing for a 1,500 SF home with 15 rooms because they counted all the closets? Secondly, the tax records are often incorrect if they cannot see inside the garage. Used to be all garages were square, now hardly any builder builds a square garage. Want to be even trickier??? I recently inspected a house with a full 16' garage door. New home but already sketched by the county with a 22 x 22 garage. Lifted the garage door for a real surprise. 6' deep. Back of what was to be a garage was a master bedroom. Better drive a very short car.

You can only do the best you can. If the listing says 1,600 SF, the tax card says 1,520, and the sales prices suggests you are in the right range, is it really difficult to say one or the other and state the conflict? And if it is the subject, you are going to measure it yourself aren't you?

There are lots of problems worse than that. Recently a sale came across of a double wide, and you know how precious MH sales can be....$70,000. I had appraised that property 3 years ago for $115,000. Wow! what happened? 20 acres and a 2,400 SF DW for 70K? I finally saw the buyer in town. I said surely you paid more for it. Yes, the reply was. I paid $40,000 in cash and $70,000 I borrowed. The borrowed amount was the amount they paid on document stamps. If you do not confirm the sales directly to an involved party, you risk making a real boo-boo. And even then I might not have gotten a straight answer if I had not known the buyer all my life. It goes with the territory.

 

[Bemis Pownall]

years ago came up 20% smaller, made a second visit, same results.
listing agent knew(smuck). thing was a resale by builder due to major problems after lawsuit.
Buyers agent wanted to know were the other xx feet went "maybe the listor had a brochure" but lady i saved your clients $10K, guess her commission check was smaller by the same amount.

Inspection today HO asks why all the measurements? "well if I didnt I'd only be here for 5 minutes", naw just kidding, "we must check home size cuz county is not always accurate.." its a current model I could just down load the floor plan from builder's web site and not meausre, probaly include it anyway in the report.

 

[Richard Carlsen]

I am constantly amazed that a broker will charge someone $17,500 to sell their house ($250,000 x 7%) and not take the time to accurately measure the house or even to take the time to learn how to accurately measure the house.


I am also constantly amazed that a broker will charge someone $7,000 to sell their house ($100,000 x 7%) and not know if it is a HUD Code sectional or a BOCA modular.