Measuring the Square Footage of a home

By
Real Estate Agent with The Virtual Real Estate Team 104556

bad mathI took my initial real estate class in Oklahoma City in September of 1989. It was something i always wanted to do, but this time it was for changing from a retail career to a real estate one. I had a great teacher which is fortunate to start off well. I do remeber the class getting angry with him though. he wanted to spend time talking about avoiding liability. Many protested saying you are supposed to teach us how to pass the real estate exam! He replied, I am going to teach you how to pass the test in the real estate world. Guess where he started?

Measuring the square footage of a home, and how to talk about it, and how to represent it. it is a lesson i never forgot, especially when he told stories of Realtors being sued becasue they told a client that a house was exactly a square foot size. When it turned out to be 300SF smaller, they ended up buying them a home. So an important phrase came into my everyday speech, MOL which stands for more or less. Ikay that is pretty basic. Do you have a point beside this?

Yes I reply. I was in our MLS today checking for listings in a certain area and a certain size. The home was listed by a Realtor as 1315SF agent measured. Red Flag No. 1. Then in the remarks the Realtor said he added the Florida room to the size, and in looking at the comparables he valued the size of the glass add on to the patio at $100 square foot for the 240SF add on meaning it was worth $24,000, or the same value as the brick exterior original part of the house. Red Flaf No. 2.

Red Flag No. 1. You are asking for trouble when you put in agent measured. It has been 17 years ago but I took appraisal courses and was certified. It is much harder now to become an appraiser, but I learned enough to help me as a Realtor even today. This was a realtor who didn't know how to measure. Where did he get the numbers? The plans? Folks, one of the hardest part of the classes was getting a measurement somewhat right. I say somewhat becasue it is not an exact science. Three appraisers may vary 10 to 20 square feet but it is close not exact. If a Realtor not qualified as an appraiser puts in what they think is the size, get ready for the cpmpalints and possible suits. It you are going to use a measurement, go with the courthouse records, ot if you know a real apprasial square footage use it. If the appraisal is relatively new I will use that even if it is smaller than the house. Remeber MOL. it is just that i would trust an apprasiers MOL more the the courthouse.

Red Flag No. 2. Pricing a home is where you separate the quality of a Realtor. Again, even with excellent statistics pricing is not an exact science, but like the appraisal it is important to get close. Starting with this premise let's evaluate the add on. I know that apprasial guidelines have change since my classes but sometthings remain the same. This was a galss like addom to the patio. it did not change the roofline, the construction was not the same as the main house, and no central heat and air was added. So essentially you have an improved patio. So when you are pricing the home, think like an appraiser. First, the appraiser will measure the orignal construction  and give a value, so lets say that that is 1097 (MOL) and it is worth $100 per square foot. The given that the add on is 240SF what is it's value. Could be zero, could be $5000, but not $24,000. So let's be generous and say $5,000. Now you have a home priced at $114,700, not $137,700. If you add in the greater fool theory that someone will pay the higher price remember that this is 2009, not 2005, and the appraiser does not subscribe to the greater fool theory like a buyer. At that point, that buyer may have the most valuable $400 real estate lesson he can receive in how to price a house based on appraisable square feet. And the listing Realtor may find themselves in front of a Board hearing or the Real Estate Commission.

Take away. remember MOL, when in doubt call an appraser for advice, and never no never enter a listing into the MLS as agent measured. Thank you my first real estate teacher, Mr. Kraettli. 20 years later I remember you lessons.

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  1. Judi K Barrett 09/14/2009 08:22 AM
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Rainmaker
421,547
Jean Hanley
Coldwell Banker Kivett Teeters - Hemet, CA
Specializing in Folks Who Want To Buy/Sell Homes

Great info/advice Joe.  I got my real estate license in 1978, when we always measured the house.  It was kinda scary as you said, putting yourself on the line for that sq ftg.  Other items I heard horror stories on besides the sq ftg, and I suppose there are many, is when you list a hot tub as a "jacuzzi"  Jacuzzi is a brand name, and unless you want to purchase a new one for your clients, you had better call it a hot tub/spa.  There are many things you can get in hot water for in this biz.  It jsut pays to think ahead and plan your input.

September 10, 2009 01:25 PM #1
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

jean, the way we were taught was you took the outside measurements that were the greates and create a rectangle, then use measure it. Then you start subtracting the cutouts and the angles, then you measure the inside of the gargae and remove that, then you take out the mechanical closets. That' the start, thyen if it is a two story the real fun begins as you allow for the stairway, then you check the upper rooms to see if they slope to low for a normal human being to walk under. Then as Sony and Cher sang, The beat goes on. Why would i want to do this. However, some basic lessons need to be learned and you hope it isn't the hard way.

September 10, 2009 01:31 PM #2
Rainmaker
80,016
April Solomon
Solomon & Associates Realtors, Inc. - Port Richey, FL
Realtor/GRI

Great report and info, so many agents have gotten into trouble on square footage. we just use the tax office for our square footage these days.

September 10, 2009 01:31 PM #3
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I don't understand why Realtors want to take that risk, but in my real estate career no one has taught that in a class for continuing education but should. I took the appraisal course becasue i wanted to be a better Realtor. My favorite story about an add on is one where i was showing a house that had a cheap add on to the patio, much worse in condition than the one i blogged about. I told the realtor who i liked and who had been in business 30 years that she had the add on at the same price as the house and an apprasier would not agree. She said yes they would because it had double pane windows and she was serious. She was a great lady but this time she was proved wrong.  

September 10, 2009 01:43 PM #4
Rainmaker
496,990
Lori Cain
Chinowth & Cohen Realtors - Tulsa, OK
Midtown Tulsa Real Estate Top Producer

After the recent ruling by the Oklahoma Supreme Court regarding the square footage issue, I am asking all of my Sellers to have a square footage measurement done by a licensed appraiser -- there is someone in Tulsa that will do smaller homes for $50. Our MLS requires that the square footage source be either the court house records or an appraiser.

Judi - I commend you. I would never dream of trying to calculate the square footage myself!

September 15, 2009 07:35 PM #6
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Lori, just got back into town. I wasn't aware of a recent Supreme Court ruling. Can you fill me in? FYI, I voted for your post in the contest.

September 16, 2009 01:38 PM #7
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Todd Clark
Keller Williams Realty - Beaverton, OR
Broker - Beaverton, Oregon Real Estate Expert - (503) 524-9494

I always say try to use the last appraisal and if that isn't available use the county. ONLY USE PERMITTED SPACE!

Todd Clark - www.LivingBeaverton.com

September 19, 2009 12:04 AM #8
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