Today we’re talking about something very common in my experience in the industry, and that is square footage discrepancies. Especially, discrepancies regarding the square footage that is input into an MLS listing.
Now, the situation that I was dealing with was one of my agents, the listing agent on a property, that had a square footage quote in the tax record that was, in the opinion of the seller, lower than the true square footage.
And their reasoning for that was, well, when we had our appraisal done when we bought the house five years ago, the appraisal came back and said that the home was actually 2,300 square feet, not 2,100 square feet.
We have the appraisal, we’d like to market it as a 2,300 square foot home. Obviously, that’s going to have implications regarding the price per square foot being more attractive. It will be lower if you put in that higher square footage number. So that’s precisely what they did.
In most MLS’s around the state of Texas, there is a qualifier for inputting square footage. Now, most MLS’s the qualifier by default is the tax record.
In other words, when you put the listing into the MLS and you hit autofill, it’s going to fill a lot of those fields directly from the tax record, one of those will be square footage. And if you want to change the square footage quoted in the MLS, you’re going to have to put a different qualifier in there other than \taxrecord.
And so, that’s what they did. They put in 2,300 squarefeet\perappraisal and they were happy to include that appraisal quote in the MLS information.
The house went under contract, the buyer’s agent went about their business of negotiating repairs, they got a couple of weeks from closing and the appraisal came back. And it came back closer to that 2,100 square foot quote that the county appraisal had as opposed to the bank appraisal that the sellers had quoted.
The buyer’s agent and the buyers were very upset. They said, “We don’t want a 2,100 square foot house, we thought we were buying a 2,300 square foot house.
I’ve seen this over and over throughout the years and the bottom line is this, the onus is upon the buyers and therefore their fiduciary, the buyer’s agent, to research that.
If you see something in that qualifier field other than tax record, then the onus is upon you, the buyer’s agent, to notify your clients. This house, there’s a discrepancy between what’s in the tax records and what’s in the MLS. Tax record says 2,100 square feet, and they’ve got 2,300 square feet per the appraisal.
This needs to be done during the negotiation process, not after you’ve gone under contract, and certainly not after you’re out of the option period.
So, the bottom line for you to realize is this. If you are the listing agent, you’re going to need to put a qualifier in there. If you put something in the square footage field other than tax record, and typically the choices are something along the lines of; per the appraiser, per the owner, there’s even one in some MLS’s called per agent, and then there’s another one in a few MLS’s that says see agent where it’s actually telling the buyers and the buyer’s agent, hey, you need to come talk to me because here’s where I got this number.
But if you’re the buyer’s agent, that’s where it can really get sticky. Because in order to be that fiduciary for your clients at the highest possible level, you need to make sure that you have all of the details covered. And that’s a pretty important detail to most buyers; the square footage of the house that they’re spending hundreds of thousands of dollars on.
So, what recourse do you have as a buyer’s agent if you go under contract and don’t address it? If you’re out of your option period and you don’t address it? Not a lot because it’s right there in black and white, 2,300 square feet per the appraisal, all right. So you have got to be very, very careful in this industry regarding all of these details in square footage, it’s a pretty big detail.