In many parts of the country, square footage is becoming one of the most important home selection tools that a buyer can use, primarily because it can be quantified as a hard and fast number. But can it? Should agents help their clients by measuring square footage?

What buyers and sellers don't know is that square footage can vary tremendously depending on who is doing the measuring, which measuring tools and techniques are used, and what is considered the appropriate measuring standard for the type of dwelling (single-family, multi-family, etc.) If a home were measured by a county appraiser, a bank appraiser, a Realtor, the homeowner, and the buyer, chances are very good that that all five would turn in different numbers!

This results in considerable liability for real estate agents, and confusion on the part of clients when agents balk at measuring square footage. Are agents shirking their duties or is there real cause for them to be skittish?

Relying on square footage numbers can disappoint both buyers and sellers, and in the worse cases, embroil agents in litigation, says Phoenix attorney and consultant on broker liability and risk reductionRobert N. Bass, Esq..

"I have lots of cases in which square footage of the house and lot size are the source of many claims," says Bass.

Not all square footage is created equally

What brings tempers to a boil and litigants to court is that sellers and buyers usually see square footage to their own advantage. Sellers want to profit on square footage because they pay property taxes based on square footage for their neighborhoods. Buyers see square footage in terms of living space and a means to justify their loans and planned improvements, many of which are sold by the square foot, including flooring and counters.

A typical example of where sellers and buyers' expectations clash is the garage conversion. Sometimes sellers are surprised to learn that while garage conversions may add more living space, it may not significantly improve the price of the home for resale, because remodeled spaces, particularly those which do away with a desirable feature such as a garage, may be valued less in the marketplace than the original square footage. Add-ons will also be valued less in the marketplace if the added room is obviously of lesser quality or doesn't blend well with the rest of the house.

Banks will also place ceilings on what they will lend in certain neighborhoods using square footage as a perimeter. If a home has add-ons that make it larger than the comparables in the neighborhood, the additional square footage may actually lower the appraisal per square foot. Some buyers may find that they can't be approved for a loan for such a house because the listing price/square footage ratio doesn't meet lender guidelines for the neighborhood.

Once square footage has been obtained, buyers may find that the numbers still aren't set in concrete. As sellers, they may find that the next buyer's square footage estimates conflict with their own appraisals, and that the new buyer may ask for a listing price reduction based on lesser square footage.

Why some agents balk at measuring sellers' homes

"Around here it's considered unwise for the agent to be measuring a property. If all we have is the tax roll, we say so in the listing, since that's the least reliable source," says Alaska residential and commercial Realtor Niel Thomas. "Next best is an appraisal in the owner's file, and I like to include those measurements excerpted from an appraisal in the disclosure package."

"Because measurements are matters codified in the APAP standards, and required by lenders for their standards, I don't want to take the liability for making those kinds of calls," he adds. "I think it's good advice that an owner should not be making those representations, either. An owner should hire an appraiser who has a solid reputation in the appraisal community and among lenders to measure (not appraise, just measure) the house. Then I can advise him on a selling price, once I know what I have to sell."

Northern Virginia broker Mitzi Romiti concurs. "In Northern Virginia, we measure and print out the room sizes, but there is no mention of the number of square feet in the property," explains Romiti who uses a sonic measuring tool. "That's because there are at least three methods of measuring, and we don't need the responsibility of putting in incorrect information. Single family and townhouses have no square footage, while condominiums do have the number of square feet. That figure is taken from the county tax records. I'd say those measurements are off at least half of the time.

Tennessee Realtor Julie Nelson says, "We had a sale close recently and the buyer was irate because the square footage was 20 square feet off, and he wanted to be reimbursed 20 times $100. Our agent had noted in the remarks: "square footage according to courthouse tax records." We could then argue that the agent was putting the buyer on notice that the square footage was possibly not accurate and that, if square footage was important to him, he should measure himself or hire someone to measure. We had given him every opportunity to do this, and he did not. Our attorney said that he would much rather argue this case with the courthouse tax records disclaimer than to have had the agent mismeasure and put that in the MLS brief. While we still feel it is part of our job to accurately measure a house, I must say that putting in the "courthouse tax record" disclaimer on all our listings is now pretty tempting."

What should you do when clients ask you to measure square footage?

According to Bass, agents representing buyers should do the following:

1. Give the buyer the tax roll information, and any information provided by the seller or builder, but do not adopt that information as your own. Make it clear where it came from, and that it is not a representation by broker.
2. Make the buyer acknowledges in writing that "All measurements/figures given are approximate, and they are relying solely upon their own investigation of the property. Buyers must satisfy themselves that the property is suitable to their needs."
3. If buyer's insist that their agents measure, then hold the "dumb end" of the tapemeasure and let the buyer make notes. Make a copy of the buyer's notes for your file.

Will such disclaimers prevent lawsuits?

"Nothing can prevent a determined Plaintiff from suing you," cautions Bas. "But you can have a thoroughly documented file with which to defend yourself. It's all about giving your lawyer a defensible case."

And how should buyers and sellers look at square footage? As part of the bigger picture. Buyers and sellers have ultimately chosen the same home for a number of reasons - location, community, and the home's unique features. Focusing too much on square footage over other other living conditions may unnecessarily spoil what could otherwise be a great value.

Published: March 8, 2001

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