Appraisal came back with different SQFT than the listing

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Appraisal came back with different SQFT than the listing

Prabhakaran Subramanian
Member since 2021 · 10 posts · 0 votes

Hi, 

Recently i bought a house. As part of appraisal, appraisal came back with different SQFT than the listing.

House was advertised as 2006 SQFT and tax record / Builder doc shows the same. Appraisal report shows house is with 1908 SQFT. There is a difference of 98 SQFT less.

Reached out to seller agent and they are telling what ever they listed is as per tax records (they put 2006 SQFT) and not able to reduce the price. 

Need some help / input - what are the options for me now? Closing is 1.5 weeks away.

Do i need to reach-out to attorney for checking the options / back out?

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Max T.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
5y

@Prabhakaran Subramanian

Why does a difference of <100 sq ft matter to you? It’s the same house that you viewed and put an offer on.

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  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y

    Square feet absolutely make a difference. Listing agents use square feet to help come up with listing price. Appraisals use square feet to determine value. If the comparable sales are going for $267 per square foot, and you lose 100 square feet, that affects value by $26,700. There are standardized methods that appraisers use to determine square feet, which is the same method real estate agents and the county uses in my city. Of course there can be a minor difference, but I wouldn't call 100 square feet minor. I have rental houses with bedrooms that measure 100 square feet.

     The equation for property taxes generally uses plumbing fixtures, square feet and quality of neighborhood. That means if the tax records show it bigger, you are paying more taxes. 

    Just because the MLS has a legal disclaimer to verify information, that is not a excuse for sloppy or incorrect information.

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  • Ronald Allen Barney
    Real Estate Agent · Tampa, FL · Member since 2020 · 411 posts · 373 votes
    5y
    Originally posted by @Prabhakaran Subramanian:
    Originally posted by @Ronald Allen Barney:

    Appraisals will only count climate controlled space as housing SQFT.  Some people will add porches and decks, and sometimes even garages.  Tax records probably just believed whoever told them.

    It's really a matter of whether you think this property will cash flow, at 2006 SQFT or 1908 SQFT.

    Hi Ronald, thanks for your response.

    If i buy this house now, after sometime if i try to sell, do i need to go with what in tax records currently (2006 SQFT) or the apprisal value which i got now (1908 SQFT).


    In this apprisal / tax record, Garage space was not included.

     When it comes time to sell, contact the county and let them know of the discrepancy between the tax record SQFT and appraisal SQFT.  The county will update their record.

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  • Zambricki Li
    Real Estate Agent · Los Angeles CA + Lake Tahoe, NV and CA · Member since 2021 · 180 posts · 158 votes
    5y

    You could ask and pay for a second appraisal, since it's subjective. Next appraiser may agree with you if it's closets ect. If its a garage it's not going to count, though you may be able to permit it yourself (build an ADU!) The only thing that matters is does it work as an investment. I have one of those laser measure tools and do it on inspection day. So we know before appraisal. Call it out during inspection contingency when you have some leverage. Congrats on the house if you decide to close.

    Z

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Prabhakaran Subramanian:
    Originally posted by @Mike Dymski:

    IMO, 98 SQFT (<5%) is not a large enough difference to justify renegotiation.

    Thanks for your response. The difference it makes is $254 per SQFT Vs $267 per SQFT

    I like how the listings are done on the MLS system in Charleston SC.. big bold letters ..

    IF SQUARE FOOTAGE IS IMPORTANT MEASURE !!!    in other words its up to the buyer to verify the square footage etc.

    it is very common to have the appraisers come up with different numbers.

    Just like you can hire two survey companies to survey the same property and the pins could be 3 inchs off or a foot or more. 

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  • Phillip McDonald
    Pueblo, CO · Member since 2020 · 24 posts · 20 votes
    5y
    Originally posted by @Joe Splitrock:

    if the comparable sales are going for $267 per square foot, and you lose 100 square feet, that affects value by $26,700.  

    The math on this works a little different. The price of a property includes, above grade, below grade, garages, outbuildings, land, site improvements, everything. While it is often calculated as a price per square foot of above grade the value of each above grade square foot is not the price per square foot of the property. To reach the actual value of each square foot of above grade square footage you take the purchase price and subtract the value of all other elements such as land, basement, garage, site improvements etc... This is also why appraisers do not adjust the gross living area difference at the price per square foot of a property. I hope this provides some clarification.

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  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    5y
    Originally posted by @Russell Brazil:
    Originally posted by @Prabhakaran Subramanian:
    Originally posted by @Russell Brazil:

    There is no official way to measure the square footage of a house.

    Imagine measuring using the outside walls, then measuring inside...youd get 2 totally different numbers. Closets or no closets. 

     Thanks for your response. I agree there could be some difference even if i go with one more time doing appraisal. Result may vary.

    Will this difference help to backout / negotiate?

     No it won't. Have 10 different people measure the house and you will get 10 different square footages. 

    And 10 different appraisers will give you 11 different values. (Someone will say "it's worth between "X" and "X" + 10%)

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  • Sarah BlessePro Member
    Property Manager · Fresno, CA · Member since 2017 · 35 posts · 23 votes
    5y

    @Prabhakaran Subramanian

    This happened to me! Tax records were off by 280 sq ft. I didn’t care though because I bought it for a rental and the numbers still penciled out. Good luck!

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