When you’re house hunting, it’s crucial to compare the advertised square footage of a home with the official records. This can help you spot any discrepancies and understand why they might exist. The official square footage is usually taken from the county assessor’s office records, which are used to determine property taxes.
As a homeowner, you might prefer a lower recorded square footage to keep your taxes down. But if you’re selling, a higher square footage can help you get a better price. So, if you’re planning to sell in the next few years, you might want to update the assessor’s office with the correct, larger square footage.
Sometimes, sellers might exaggerate the livable square footage in their marketing materials to make the home seem larger. They might then include a disclaimer advising the buyer to verify the square footage themselves. So, buyers, be aware!
This article will discuss the most common reasons for incorrect home square footage, how to prove the correct square footage of a home, and how to calculate the square footage for a real estate listing.
Common Reasons for Incorrect Square Footage
Having visited open houses for the past 20 years, I’ve noticed that the advertised square footage often differs from the city assessor’s report. The advertised square footage is usually larger than what’s shown on the tax records. Here are some common reasons for this:
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Outdated Tax Records: Tax records are only updated after a sale or a remodel with permits. If there hasn’t been a sale or remodel for years, the tax records won’t show any updated housing information, including the latest square footage. Also, any changes in tax records may take time to be reflected online. In some cities, it can take up to five years to get your official square footage updated.
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Unrecorded Renovations: Homeowners often remodel without permits to save money on remodeling costs, permits, and higher property taxes. Some cities have strict requirements for passing inspections for building, plumbing, and electrical work, which can make remodeling a nightmare. However, once the work is done, it’s satisfying to know it was done properly and is recorded in the home’s Report of Residential Build (3R report card).
Discrepancies in Square Footage Over Time
Over decades of ownership, the likelihood increases that the owner has done some unpermitted home remodeling work. This could be minor, like changing the wall tile, or major, like removing walls and expanding the property. If the tax records show a smaller square footage than the marketed square footage, you should ask about unpermitted work and assess how much you’re willing to pay for it.
No Recent Appraisal
Part of selling a house is hiring an appraiser, especially if there hasn’t been an appraisal done in years. If you’re getting a mortgage, the bank will require an appraisal to ensure the house is worth what you want to pay for it. An independent home appraisal can educate and protect both parties.
Differences Between MLS and County Assessor’s Tax Records
The tax data that listing agents refer to on the MLS may not be updated according to the county assessor’s data. In such cases, the seller can obtain updated documents from the county assessor’s online portal. Buyers should also have their own independent appraisal to measure the livable square footage.
Importance of Correct Square Footage
Providing the correct square footage is important for several reasons:
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Buyer’s Criteria: Square footage is one of the main criteria used by buyers. If there’s no square footage listed for a home, this is a red flag. Most of the time, sellers don’t list the square footage because the MLS or county assessor’s office shows a lower square footage, which would make the home seem more expensive on a price per square foot basis.
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Seller’s Credibility: When buying a home, you want to feel confident the seller is being honest. Listing improper square footage that’s beyond reality reduces the seller’s credibility. If the seller’s credibility is reduced, so are the chances of them selling the house at a top price.
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Potential Fines or Lawsuits: The MLS can impose a fine against sellers who represent wrong information on an MLS listing. This fine usually depends on the type of violation and changes across different MLSs. Generally, this fine ranges from $200 to $1,500.
Proving Accurate Square Footage
To protect yourself as a seller, you need documentation that proves the accurate square footage and layout of your home. This could include a recent appraisal report, updated county records, floor plans, or blueprints.
What Counts as Livable Square Footage?
Not all square footage is equal. What you want is livable square footage. To be categorized as a living area, three conditions must be fulfilled: it should be heated, finished, and directly accessible from other living areas.
Measuring Square Footage According to MLS Guidelines
If you want to measure the square footage of a home yourself, here are the MLS guidelines: start by measuring the exterior side of your home, draw a floor plan, and measure interior spaces that can’t be accessed or measured from the exterior.
Conclusion
If you’re a buyer, don’t take the marketing material at face value. You must do your due diligence and thoroughly inspect every aspect of a house before you buy. Calculating and verifying the home’s livable square footage is something that must be done. If you end up buying a home that you thought was larger than it actually is, you could potentially lose a significant amount of your home’s value. So, for your own sake, spend time carefully measuring the square footage of the home you want to buy.
