(CHEROKEE LAKE REALTY WRITES A WEEKLY COLUMN FOR THE GRAINGER COUNTY JOURNAL NEWSPAPER. THIS WAS A RECENT QUESTION ASKED BY A READER.)
Yes. Let me answer that in a different way. Yes.
Overstated square footage in advertising your home for sale can lead to several problems. From minor to major. The buyer’s financing could fall apart, killing the deal. The listing real estate agent and broker could face fines. And there is also the possibility of lawsuits involving the agent and the sellers. Yep.
Banks will require a professional appraisal on a home loan to confirm its value. If the appraiser finds the Home’s square footage to be less than what it was listed for, and agreed to in the purchase contract, the buyer’s financing could hit a snag. This could lead to renegotiations on the sales price agreed to, or worse, to a total cancelation of the purchase contract. Knowingly misrepresenting the square footage is a form of fraud and can lead to a lawsuit. The agent has a professional and ethical duty to ensure that the Information they provide is accurate. They can be held liable for misrepresentation, if they knowingly include false information. In the case of Horike v. Coldwell Banker, the listing agent intentionally exaggerated a luxury home’s size in Malibu. The agent failed to disclose knowledge of the inaccuracy. The buyer filed a lawsuit after the sale, and the case went all the way to California’s Supreme Court. The Supreme Court sided with the buyer.
So how to make sure the square footage is correct? The best way is to hire a professional, an appraiser. Appraisers follow industry standards to ensure reliable measurements of the house that will provide accurate square footage. If you applied for a HELOC or any type of loan on your home, it has already been appraised, so you can use the measurements from that appraisal. If you had the house built, research the blueprints and use those measurements. If you measure the house yourself, only include heated, finished areas that are located above ground. A space generally must meet four criteria to be included in the square footage of a house. It must have flooring, wallcovering, ceiling, and heating ability. And the ceiling must be at least seven feet high. Exclude garages, unfinished basements, screened patios, and enclosed porches without heating and cooling. There are valuable articles online that will walk you through the process of measuring your house.
County records that reference square footage of a house are not always precise. If you added some space, finished a basement, or a room, and did not report it to the County, your square footage will be understated. Documenting more square footage can improve your property’s sales price. Price per square foot is often used by buyers to compare homes’ sales prices.
So yes, the correct square footage of your house, that will be referenced, as you list your home for sale is very important. It may save you some heartache down the road.
