Beware | Inaccurate Square Footage Numbers Can Misrepresent A Home’s Value
Home value analyses these days are based heavily on a “price per square foot” calculation. In order to give a correct valuation, you want to make sure that you are working with the correct square footage number for the subject property, and EVERY house that you are using as a comparable as well. When most properties go on the market, the agents will use the square footage number that is documented on the tax rolls. Here in Coconut Grove, we find that the tax roll figures can occasionally be wrong due to additions/expansions to homes that have not been recorded. When there is a question on the square footage of the subject property, our team will often enlist the help of a property appraiser to measure the house so that we can make sure we are properly representing and valuing the home. But when it comes to the comparable properties, we don’t have a way to double check the square footage numbers aside from the tax rolls (which as I said can sometimes be wrong).
It may come as a surprise to the consumer that Realtors can put whatever figure they want for the “Square Footage” field on the MLS. Some companies, including EWM Realty International, require the square footage to be certified by an architect when it varies from the number on the tax rolls. This ensures that we are not misrepresenting the public. But unfortunately not all brokerages are so diligent.
The “square footage” issue has become even more of a problem lately with new construction homes. Many builders, who often times have their own brokerages, will put the Total Area Square Footage number in the field for Adjusted Square Footage on the MLS (the tax information has not been recorded yet for these properties because they are new). It works to their benefit because it looks like the property is larger compared to other similarly priced homes and it also gives them a lower “price/square foot” figure. This is deceiving to potential buyers who will think they are getting more for their money. For those of you who aren’t familiar with the difference, the Total Area includes everything under-air as well as all of the covered outdoor spaces whereas Adjusted Square Footage includes everything under-air plus a percentage of the garage and covered outdoor spaces. In our market, Realtors calculate “price/square foot” numbers based on Adjusted Square Footage.
Is there legal recourse if a buyer purchases a home based on false information? Probably not. There is a disclaimer on the bottom of every MLS listing that says “The information on this page is believed accurate but not warranted”. The best advice that I can give to buyers out there, is to work with a knowledgeable, local Realtor who will do their homework and make sure you are not being mislead by inaccurate information.