Buffalo, NY · Member since 2016 · 11 posts · 4 votes
Hello all - Newbie here. I'm under contract on a home I'm buying to live in and Airbnb the attached In-Law suite. The listing agent wrote that the house was 4,000 sq in his description, and the mls listing indicated 4288. One week away from closing and the appraisal comes back at value of sale price, but 1,005 sqft smaller - 3283 sqft. Asked the sellers for price reduction and they refused.
My lawyer is on vacation for the next few days and my realtor is stumped.
What do I do? Is there any avenue for recourse or damages? 1005 sqft discrepany is signifigant, so I can not understand why the sellers would expect me to pay same price. The sellers and agent are not challenging the appraised sqft number of 3283 - just said that's what they thought it was based on city records.
@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.
Measuring GLA is pretty standard among appraisers.
An ADU or other room with no access from inside the main house, if you have to go outside or through the garage, it is not GLA. A basement, enclosed patio, garage is not usually GLA. In some circumstances a basement might be treated as GLA, such as it is typical for that area. A finished attic might qualify, ceiling have to be high enough, etc. If it is a weird footprint with odd angles or curves it gets difficult to measure. Second stories that don't line up well with the first can be difficult to measure.
But with that big a difference the appraisal should explain the discrepancy, even if it is just "public records are wrong, and who knows why".
My experience is Ca. If you have losses associated with pulling out of the deal due to seller realtor indicating 25% more footage you will have more options than not having any damages.
Talk to a good attorney. They will provide your options. If you have no/little damages, I suspect your options will be to purchase at agreed upon price or do not purchase. If you have damages then you can raise a bigger stink that may work to get you a discount.
@Sadie Bynum the most important issue shouldn’t be the square footage but the appraised value. If the appraisal value is below the contract price and you included an “Appraisal Clause” stating if the home does not come in at value or “Financing Clause” stating that if you can’t obtain financing you should be able to get out of the contract and get your earnest money back. Also, surely your lawyer had a back up to advise your while they are not available, if not, might be time to shop lawyers. Does your state require surveys? Surveys are usually more accurate because their equipment is far more advanced,
I didn’t quite read thru all the posts, but if you are using a bank for financing, you should ask them not to approve your funding. The square footage is a huge determinant in the appraised value. Surely they would have the same logic as you in that a 1000 sf difference is a significant reduction in value.
@Sadie Bynum You saw the house, felt it would suit your needs and made an offer. What did the appraisal come back as? If it appraised at or above your offer, then go for it. The square footage is a number on paper. If the house does what you need it to do and the numbers work, just do it.
Using an analogy for clothes. If you tried on a dress that fit perfectly and you loved only to discover it was labelled the wrong size, would you turn around and put it back?
Its not like you made an offer sight unseen, and have been deceived - sure its a bug discrepancy on paper, If the house appraised at the agreed upon purchase price, wheres the problem? you viewed the home, liked it as is, enough to enter a purchase agreement, now got the value confirmed through appraisal.
I would not lower the price as a seller either, i would apologize for the mistake and tell you to either take it or leave it - which are exactly your options, unless you want to have your lawyer check if there is any legal recourse - but i doubt there wasn't any language on the PA that has the sellers back.
If the numbers still work, pull the trigger, its not worth getting all worked up about it, leave the emotions out of it :) Good Luck, let us know how you decide! 🤙🏼
Here in my area the county assessor seems to be off on sf measurements quite often. We typically have them measured using a third party. When buying, we are usually basing our purchase price, especially when flipping, off of a price per square foot. Therefore, when buying to flip we will definitely verify square footage because it will be important when it comes to pricing the rehabbed property. It’s not quite as important, imo, when purchasing a rental, bc renters are more concerned with bedroom/bathroom count, finishes, etc.
In your situation, if the house appraises and the numbers will, it would likely be worth buying still. I would still attempt to use it as a negotiation point though.
The bottom line is the exact square footage probably only really matters if the deal is dependent on that number, i.e. flipping.
This is always a minefield for a real estate agent. An agent should rely on the County Records/Appraisal District unless there is definitive evidence to the contrary. Saying that, any experienced agent should be able to differentiate a difference of 1000 square feet. Could it be the County included a basement and the Appraiser did not ?
Since the property did appraise for the sales price, I doubt a seller is going to give much if any concession on the sales price. Your options are really to close or not to close and receive your earnest money back
@Sadie Bynum Did the realtor come up with the sales asking price using sq ft? It is usually a big fsctor. Because the appraiser will use the fact that a ready and willing buyer has already agreed to the price to justify his value. I understand your reluctance to proceed.
Price per SF includes thing that are not GLA SF. Like land. Pools, outbuildings, views. I don't see price per SF as being too useful a figure around here. i.e. I pay it no mind.
Thanks all for your comments and ideas - they are sure to help drive my conversation with the lawyer (As some one noted, NY state requires them - I did't seek/hire one just because of this) to determine my options here.
NY is a buyer beware state and most contracts sell as-is. This places the responsibility on the buyer to verify and perform due diligence. If the seller referred to city records and weren’t actively concealing then there’s probably not much that can be done. If the appraisal came back much lower because the comped properties were all smaller that would have been one thing, but it came in at the contract price and now you think you should get a discount?
@Jason Lee - I raised my concerns that the house did not seem to be 4k sqft when I did my walk throughs. I was assured by the sellers agent it was. Weeks went by and then when the appraisal was done and the home was measured, it was determined to be 3k sqft. My offer was on the 4ksqft home they marketed, advertised, and went into contract on.
Maybe you think what happened is ok or somehow my fault - you are entitled to your opinion. We are not talking about 100 sqft. 1005 is substaintially different. But hey, if you'd be ok with it, cool.
Absolutely never take the square footage from a real estate agent. Most of them are incompetent in this field (no offense). Additionally, they are sales agents that just fluff and build up a lot of hype on a property. The town tax assessor has the actual data, square footage etc. The appraiser typically has the most accurate data
Absolutely never take the square footage from a real estate agent. Most of them are incompetent in this field (no offense). Additionally, they are sales agents that just fluff and build up a lot of hype on a property. The town tax assessor has the actual data, square footage etc. The appraiser typically has the most accurate data
Exactly how do you think agents are "incompetent" in regards to square footage ? The vast majority of MLS systems have an autopopulate feature from the County/Appraisal District and agents rely on this information as it is the best available information(according to you as well). With all the liability out there for an agent, do you actually think they are guessing to hype the property? An Appraiser actually does measure(hopefully) and while this information may be more accurate it comes much later in the process
@Greg H. Here in NEW JERSEY on my mls, none of the data is linked to tax assessor offices. They are completely separate which is a nightmare for us appraisers. Therefore, only about 10% of listings in my area have the square footage stated on them. Of those listings the square footage stated on them is a "guesstimate" from the listing agents. I just did an appraisal of a house that was 3,500 sf and the MLS listing agent said it was 5,500 square feet. Even the tax assessors records matched mine. The mls reports also say "Information is deeded reliable but not guaranteed"
@Sadie Bynum I wouldn't be hung to much on SF even if -25% of what initially advertised. Have to agree with Theresa Harris above...More important in my mind would be if the house appraised at offer price or above...If significantly below you should ask your lawyer if you can walk away from the deal.
Most important though is does the house work for your goals at the accepted offer price even if smaller in SF...How does it compare to other places you seen recently?
As other before said if I was the seller I wouldn't lower the price as well...unless I was thinking you are going to walk away from the deal...IMO if your lawyer say you can walk away then you have to decide how badly you want this house and make a reasonable offer (what ever reasonable mean to you)...but you have to be willing to really walk away from the deal.
I don't know about NYS (although I live here) but in PA where I bought my last rental, seller have to submit a standard disclosure form...and if deal fell apart he would have to disclose the real SF when putting house back on market now that he know it...this can be a negotiation chip for you...which you need to check with your buyer agent and lawyer...since he might not be able to list it at what he previously did...
I just went through a similar experience with my latest accepted offer...seller got 3 offers within 2 days...mine was probably the best (at asking)...but probably not far from the others...he pulled the house off the market allegedly to repair the main waste line then came up back again 9K higher then before (I doubt repair was more then 3K)...stinking for sure...but the house still worked also with the new number so I swallowed it and accepted...then managed to reduce it another 3K after inspection...a bit like playing tug of war...you get better the more you practice.
Last point. Listing are often misleading...in some places the MLS itself will pull the SF data automatically from the county records...I recently visited a house which was advertised as 3BR/1BA with one photo from the outside...infact it was a quite spacious 5BR/1.5BA...I doubt listing agent was even once inside...on county records house showes as 3/1...
Please let us know what you end up doing...this was one of the most interesting threads lately.
@Sadie Bynum is the attached I law Suite included in the total sq ft heated?
If the value is there, and it pencils out for rental etc, don’t get too hung up on price per sq ft.
Price per sq ft is imaginary. It is affected by lot size, year built, construction materials, landscaping, roof age, lot location (does it back to a busy road, lake, or another house), updates, etc. Way too many variables to use it as your only gauge of value.
Look closely at the appraisal. Are the comps good comps? If so, the value is there. What is more important to you? Getting the house you want?... or feeling like you got a “deal” according the the “price per ft”?
@Greg H. Here in NEW JERSEY on my mls, none of the data is linked to tax assessor offices. They are completely separate which is a nightmare for us appraisers. Therefore, only about 10% of listings in my area have the square footage stated on them. Of those listings the square footage stated on them is a "guesstimate" from the listing agents. I just did an appraisal of a house that was 3,500 sf and the MLS listing agent said it was 5,500 square feet. Even the tax assessors records matched mine. The mls reports also say "Information is deeded reliable but not guaranteed"
Not having an auto populate feature is not the Agent's fault. If I were a Broker, all of my listing in that particular MLS would not have a square footage as I would have no interest in being liable for any mistakes or inaccurate information. I can only imagine how many problems and extra steps this causes for you
I'm not sure what your question is. Are you asking if there is a way for you to force the seller to lower the price? If so, the answer is generally "no" unless the contract says otherwise.
Why not just walk away if you are unhappy? I assume the underlying contract allows you to do so.
On a related note, what was the difference between the appraised value versus the contract price?
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
You liked the house, made an offer, offer was accepted, appraisal came in at the price you made the offer at. It doesn't sound like the sellers were actively trying to deceive you, and the appraisal came in at the offer price, why should they lower their price? If you're unhappy because now you can't tell your friends/family you bought a 4,000 sqft house, then have an attorney review the document to see if there is a way to get you out of the contract without losing your deposits.
Yup Gregory, you nailed it exactly. I can't brag that I bought a 4,000 sqft house. That's exactly why this situation is problematic. I'm super shallow, and there are no other 4,000 sqft homes anywhere else in the world but this one.
Advice, insight, perspectives and opions are great, and I am grateful for them, and the folks that took the time to share them. Borderline insults or assumptions not even remotely based in reality? Hard pass.