1005 Square Footage Error - Week from Closing - Any Advice?
Buffalo, NY · Member since 2016 · 11 posts · 4 votes
1005 Square Footage Error - Week from Closing - Any Advice?
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Accountant · Tulsa, OK · Member since 2018 · 312 posts · 349 votes
7y@Sadie Bynum I understand your pain, but you've posted the same thing several times in this thread. At this point, since the seller doesn't want to drop the price, you need to evaluate if it's worth it with the current price / square footage or not. If it's still worth it, then keep the deal going, if not walk away. You're only other option is to wait to hear from your lawyer to see if you have an legal recourse, however (this is my opinion, not legal advice) I doubt the legal answer will be "force seller to lower price". Things happen in REI, you just have to deal with them and keep moving forward.
54 Replies
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes7y
First, verify yourself which is correct....do the city records show a sketch?
Second, Value is value...if the rents work then they work, no matter the actual size.
Seems like it would be hard not to “feel” that kind of difference just viewing it though.
- Buffalo, NY · Member since 2016 · 11 posts · 4 votes7y
Thanks for weighing in! I actually did feel like it was not 4288 sqft when I went through. Everyone thought I was wrong and assured me the appraiser would measure it and verify that it was. Then low and behold it comes back 3283sqft. Sellers got second opionion, and it was confirmed as 3283.
I can see how one can advertise, and sell a home at 1,005 more then expect me to pay tge same sales price. I made an offer they accepted on a 4288 sqft house - not a 3283 one...
Really looking for ideas on options to resolve amicable.
- Buffalo, NY · Member since 2016 · 11 posts · 4 votes7y
@D.J. M. - Nope. Clearly identified and sold as 4288sqft. Everyone was shocked to learn of the discrepancy.
- Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes7y
@Sadie Bynum that is too significant amount of discrepancy . The appraisal differences would probably approach $100,000 conservatively. I would cancel escrow without price concessions and maybe buy it at a reduced price in the future.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Account Closed:
@Sadie Bynum that is too significant amount of discrepancy . The appraisal differences would probably approach $100,000 conservatively. I would cancel escrow without price concessions and maybe buy it at a reduced price in the future.
Not really weighting on should I or should I not.. However I really like the MLS system in Charleston SC..
there is a big disclosure on the listings that says " If square footage is important Measure " putting the onus on the buyer to verify.
and if its a big deal its written in as a contingency item up front with the offer not after the fact.
the listing agent might have taken county records which are often wrong ( although usually smaller not bigger) and relied on those.
its tough doing business in a state that is so dominated by closing attorneys everything freezes until you can talk to them.. normally this stuff in other markets is hashed out between the agents and the principals to the transaction.. I mean what is the attorney going to do they cant force anything .. but they will probably know local customs.
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes7y
@Sadie Bynum Is the city number of 4288 for “gross” area....including garage, patios, etc and the appraiser’s number “living area”? There is of course always a big difference in the two numbers.
Have you seen the appraisal yet?
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Wayne Brooks:
@Sadie Bynum Is the city number of 4288 for “gross” area....including garage, patios, etc and the appraiser’s number “living area”? There is of course always a big difference in the two numbers.
Have you seen the appraisal yet?
I have seen under roof then seen heated space
- Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes7y
Originally posted by @Jay Hinrichs:
Originally posted by @Account Closed:
@Sadie Bynum that is too significant amount of discrepancy . The appraisal differences would probably approach $100,000 conservatively. I would cancel escrow without price concessions and maybe buy it at a reduced price in the future.
Your right Jay every mls listing should have a disclaimer for buyer to verify info deemed reliable,but not guaranteed . But just going off of what is posted and the fact it came from the appraiser I would run..and do even know if it came in at value ...
Not really weighting on should I or should I not.. However I really like the MLS system in Charleston SC..
there is a big disclosure on the listings that says " If square footage is important Measure " putting the onus on the buyer to verify.
and if its a big deal its written in as a contingency item up front with the offer not after the fact.
the listing agent might have taken county records which are often wrong ( although usually smaller not bigger) and relied on those.
its tough doing business in a state that is so dominated by closing attorneys everything freezes until you can talk to them.. normally this stuff in other markets is hashed out between the agents and the principals to the transaction.. I mean what is the attorney going to do they cant force anything .. but they will probably know local customs.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Account Closed:
Originally posted by @Jay Hinrichs:
Originally posted by @Account Closed:
@Sadie Bynum that is too significant amount of discrepancy . The appraisal differences would probably approach $100,000 conservatively. I would cancel escrow without price concessions and maybe buy it at a reduced price in the future.
Your right Jay every mls listing should have a disclaimer for buyer to verify info deemed reliable,but not guaranteed . But just going off of what is posted and the fact it came from the appraiser I would run..and do even know if it came in at value ...
Not really weighting on should I or should I not.. However I really like the MLS system in Charleston SC..
there is a big disclosure on the listings that says " If square footage is important Measure " putting the onus on the buyer to verify.
and if its a big deal its written in as a contingency item up front with the offer not after the fact.
the listing agent might have taken county records which are often wrong ( although usually smaller not bigger) and relied on those.
its tough doing business in a state that is so dominated by closing attorneys everything freezes until you can talk to them.. normally this stuff in other markets is hashed out between the agents and the principals to the transaction.. I mean what is the attorney going to do they cant force anything .. but they will probably know local customs.
Morning Steve I believe pert near every listing I have ever seen from a MLS system as the statement you mentioned. Deemed reliable but not guaranteed.. I just like the Charleston MLS .. since I had never seen that before IE if square footage is important Measure
in the SF bay area sq footage on SFRs is not all that important and not a focus . as the land is worth many times 10X of the actual vertical improvements..
- Buffalo, NY · Member since 2016 · 11 posts · 4 votes7y
Yes, I've seen entire appraisal. The sellees also got the house measured after the discrepancy was discovered. No one knows why the city records are off. All measurements are identifird the same - Gross Living Area (GLA).
I just do not understand how the sellers can sell a house as 4k+ sqft, enter in to contract, and when it is determined to be 3283 and all parties agree that is the actual number, expect me to pay the same dollar amount.
- Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes7y
Originally posted by @Jay Hinrichs:
Originally posted by @Account Closed:
Originally posted by @Jay Hinrichs:
Originally posted by @Account Closed:
@Sadie Bynum that is too significant amount of discrepancy . The appraisal differences would probably approach $100,000 conservatively. I would cancel escrow without price concessions and maybe buy it at a reduced price in the future.
Your right Jay every mls listing should have a disclaimer for buyer to verify info deemed reliable,but not guaranteed . But just going off of what is posted and the fact it came from the appraiser I would run..and do even know if it came in at value ...
Not really weighting on should I or should I not.. However I really like the MLS system in Charleston SC..
there is a big disclosure on the listings that says " If square footage is important Measure " putting the onus on the buyer to verify.
and if its a big deal its written in as a contingency item up front with the offer not after the fact.
the listing agent might have taken county records which are often wrong ( although usually smaller not bigger) and relied on those.
its tough doing business in a state that is so dominated by closing attorneys everything freezes until you can talk to them.. normally this stuff in other markets is hashed out between the agents and the principals to the transaction.. I mean what is the attorney going to do they cant force anything .. but they will probably know local customs.
Morning Steve I believe pert near every listing I have ever seen from a MLS system as the statement you mentioned. Deemed reliable but not guaranteed.. I just like the Charleston MLS .. since I had never seen that before IE if square footage is important Measure
in the SF bay area sq footage on SFRs is not all that important and not a focus . as the land is worth many times 10X of the actual vertical improvements..
Thats the trouble with these posts we only have half a story and the key facts are always missing or takes numerous posts to come out
I just had a similar situation happen to me .. I sold a home whereby county records was 2600 sq ft but the appraiser only found 2200. It turned out one of the owners down the line converted the den or whatever room it was to a 2 car garage ..one of the 60's homes ... It did cost a few bucks but was able to close .
s
- Buffalo, NY · Member since 2016 · 11 posts · 4 votes7y
My biggest frustration is the sellers not wanting to reduce the home. Their agent described at marked it at 4,000sqft. The mls said 4288. So the disclaimer for the mls language doesnt cover what the agent put forward, with no disclaimer. This isnt a minor difference - 1005 sqft is signifigant. It feels like a bait and switch
- Accountant · Tulsa, OK · Member since 2018 · 312 posts · 349 votes7y
@Sadie Bynum I understand your pain, but you've posted the same thing several times in this thread. At this point, since the seller doesn't want to drop the price, you need to evaluate if it's worth it with the current price / square footage or not. If it's still worth it, then keep the deal going, if not walk away. You're only other option is to wait to hear from your lawyer to see if you have an legal recourse, however (this is my opinion, not legal advice) I doubt the legal answer will be "force seller to lower price". Things happen in REI, you just have to deal with them and keep moving forward.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Sadie Bynum:
My biggest frustration is the sellers not wanting to reduce the home. Their agent described at marked it at 4,000sqft. The mls said 4288. So the disclaimer for the mls language doesnt cover what the agent put forward, with no disclaimer. This isnt a minor difference - 1005 sqft is signifigant. It feels like a bait and switch
even if your right what are your damages ? that's the bottom line.. no one is forcing you to close.
- Buffalo, NY · Member since 2016 · 11 posts · 4 votes7y
Sorry - not sure why my reply keeps posting. I get that there may just be no recourse, and agents and sellers can list a house as one thing - when it isn't. But not knowing anything, I thought I'd ask folks who have experience and knowledge in real estate. Clearly, I don't. That's what prompted me to ask...
- Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes7y
Appraisers do not always count GLA (Gross Living Area) or GBA (Gross Building Area) using the same methods the assessor does. There is no national standard that must be recognized by all states and all parties. Brokers are supposed to verify these, but I think in many cases "verification" is satisfied when they source the public record and again, subject to the same sorts of inconsistent and non-standardized methods. It is possible (I dunno) your state has it's own standard, and then you could look into who was right or not if you fancy.
As an appraiser, I can tell you mortgage lending has it's own measurement standard, and it very often differs from the local custom of the assessor or local custom of agents. I can also say the local custom of the assessor and local custom of the agents is not always the same as each other either!!! If "your" appraisal was obtained through the bank (it's not your appraisal in that case, FYI), the lender standard ought to have been used. The lender standard is this:
GLA is counted as finished, ABOVE-GRADE space. It must be suitable for all seasons. It must be finished on the wall and ceilings with drywall or an equivalent, and have a finished floor, it must have kitchen and bath facilities - anything less than that is considered incomplete, unfinished and/or a 4-season room a.k.a., not GLA, GBA only.
Also and very importantly, if ANY level of a structure is below grade, even partially, the ENTIRE level is considered below grade. Therefore if you have a bi-level or tri-level home, or a house with an exposed walk-out basement for example, the area might be finished off to above-grade quality, and local custom or the assessor might call it GLA, but the lender counts it as BGLA (Below Grade Living Area). The reason they do it this way is so the GBA of two properties can be appropriately compared.
Generally for lending, an ADU (Additional Dwelling Unit) will be counted and added to the over-all GLA (in accordance with the previously mentioned rules on below-grade living areas). However, you may or may not see this in the appraisal, as it is is possible and permissible for the appraiser to split this up for purposes of comparison and clarity (lol - even though it also can confuse people). Therefore you could find the "missing" GLA is counted in the basement area or, is counted on a separate line-item added at the bottom of the comparison grid.
As far as a claim for false advertising? LOL. Good luck with that.
- Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes7y
@Sadie Bynum In Colorado many years ago before my time the seller/listing agent actually had to measure and was responsible for the accuracy. Now they just have to disclose where the square footage came from i.e. county records, tax assessor, wild guess, etc. and the onus is on the buyer to verify. It seems like you’re hung up on the price per square foot or just upset based on principle. It’s understandable seeing as they were off by about 25%, but meanwhile the seller won’t budge on price because of the error. They most likely know that if you walk, someone else will take it at asking price. Maybe they even have another interested party or backup offer that does not care about the square footage. It doesn’t make much difference to them (not enough to drop the price anyway). So it’s up to you: do you want to let the deal go based on being upset that they were wrong on the square footage, or can you get over this one hang-up and look at the deal in its totality to determine if it still meets your overall criteria? Since it’s an investment property, the location, rent amount, operating expenses, condition, etc. should really be more important than square footage. It’s still a pretty big property, and a bigger property would be more expensive to maintain anyway (roof, siding, flooring, windows etc. more expensive to replace, higher utilities, etc.), so you could look at it that way! I say if the deal is good in its entirety minus this one relatively minor issue, let it go and move on. You certainly shouldn’t expect sellers or listing agents to be precise with all their information. I always expect sellers to be lying or wrong and verify everything unfortunately. Remember the old adage, “Buyers are liars and sellers are worse”. It’s usually not worth getting lawyers involved for stuff like this. Remember almost every time you call a lawyer they charge hundreds of dollars per hour for vague answers. Don’t get me wrong, I love lawyers as much as the next guy, but if there are two people I would prefer to never talk to ever again it would be my insurance claims department and my lawyer. If you take legal action over every little thing like this you’ll end up investing in your lawyer’s kid’s college fund instead or real estate.
- Buffalo, NY · Member since 2016 · 11 posts · 4 votes7y
@Steve K - Thank you very much, that helps me put it into perspective. I wasn't particularly inclined to sue them - just really did not know what my options were - I wasn't even sure I could cancel the deal because of this.
I appreciate the time you took to provide a detailed response - I sure needed it!
- Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes7y
Originally posted by @Sadie Bynum:
@Steve K - Thank you very much, that helps me put it into perspective. I wasn't particularly inclined to sue them - just really did not know what my options were - I wasn't even sure I could cancel the deal because of this.
I appreciate the time you took to provide a detailed response - I sure needed it!
I think at the very least, this is a legitimate reason to walk from the deal without consequence.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Steve K.:
@Sadie Bynum In Colorado many years ago before my time the seller/listing agent actually had to measure and was responsible for the accuracy. Now they just have to disclose where the square footage came from i.e. county records, tax assessor, wild guess, etc. and the onus is on the buyer to verify. It seems like you’re hung up on the price per square foot or just upset based on principle. It’s understandable seeing as they were off by about 25%, but meanwhile the seller won’t budge on price because of the error. They most likely know that if you walk, someone else will take it at asking price. Maybe they even have another interested party or backup offer that does not care about the square footage. It doesn’t make much difference to them (not enough to drop the price anyway). So it’s up to you: do you want to let the deal go based on being upset that they were wrong on the square footage, or can you get over this one hang-up and look at the deal in its totality to determine if it still meets your overall criteria? Since it’s an investment property, the location, rent amount, operating expenses, condition, etc. should really be more important than square footage. It’s still a pretty big property, and a bigger property would be more expensive to maintain anyway (roof, siding, flooring, windows etc. more expensive to replace, higher utilities, etc.), so you could look at it that way! I say if the deal is good in its entirety minus this one relatively minor issue, let it go and move on. You certainly shouldn’t expect sellers or listing agents to be precise with all their information. I always expect sellers to be lying or wrong and verify everything unfortunately. Remember the old adage, “Buyers are liars and sellers are worse”. It’s usually not worth getting lawyers involved for stuff like this. Remember almost every time you call a lawyer they charge hundreds of dollars per hour for vague answers. Don’t get me wrong, I love lawyers as much as the next guy, but if there are two people I would prefer to never talk to ever again it would be my insurance claims department and my lawyer. If you take legal action over every little thing like this you’ll end up investing in your lawyer’s kid’s college fund instead or real estate.
Steve in NY its a lawyer closing state so most folks that work there have no clue other than to talk to the lawyer who is handling the closing they charge a set fee.. its not like U and I engaging an attorney .. now if the closing attorney takes on litigation I suspect they roll into by the hour but for her problem now they will engage I believe and its covered in the standard closing fee's they charge.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes7y
Sounds like to me just a likely difference in how an assessor measures verse an appraiser, or total sq footage cersr above grade square footage.
District Invest Group546 Reviews - Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes7y
Seems like an easy solution is at hand. The appraisal is either going to come in at or near the agreed upon price even with the reduced size, in which case you’re still doing fine and can close if you want. Or The appraisal’s going to come in 10-20% lower (depending on house versus land values that Jay brought up.) and you’ll be in a much stronger position where no one who needs a loan can buy without bringing 50% cash to the deal.
- 7yColleen F.Pro MemberInvestor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
@Russell Brazil If that was the case the real estate agents handling the transaction should have known because that would be true for every transaction they handled. Oh yes that is the total space but appraisers don't count.... whatever. Sounds like someone made a big mistake.
@Sadie Bynum Is the appraisal indicating the house is worth what you are paying? That is the real question. Is it worth it to you? If not talk to the lawyer to get your options. Your sellers don't expect you to walk a week before closing so they are taking a hard line. Your lawyer can tell you how locked in you are based on your contract.
- Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes7y
@Sadie Bynum I know this sucks; however since the Sellers aren't willing to lower the price you might want to take the path of least resistance, which is to close.
Now, I say that because you mentioned that when you walked through the property, it felt like 4000 sqft, so if this property meets your investment goals for your Airbnb getting lawyers involved is going to unnecessarily prolong the process and cause you unwarranted stress.
Go start making some money in Real Estate! 🤗
Good luck...
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