Ilyce Glink writes an syndicate column titled "Real Estate Matters." Today a reader wrote in stating they were buying a home and are set to close in a week. The lender had the home appraised and the appraisal showed the gross living area to be about 4% less than advertised. The listing sheet stated the same square footage as the tax assessor's rolls. The buyer wanted to know if it was a legitimate request to ask the sellers to reduce the sales price due to the smaller footage. If the seller refused to reduce the price, they wanted to know if they could walk away from the deal and still get their earnest money back.
Ilyce's asked the question: "Did you buy this house because you think the square footage is supposed to be a certain amount?" Was this person searching for a home with a certain square-foot home or were they searching for a house met their needs? If the home met their needs, does a 4% difference in the square footage matter?
She further states, If the square footage had come in higher, would they offer to pay more for the house?
I like that one, of course they are not going to offer to pay more, are you crazy? It goes both ways.
Ilyce also explains to the buyer that there are different methods used to calculate the square footage of a home and it could also be possible that the appraiser made an error.
This is not an acceptable reason for a buyer to walk away from a transaction and expect to receive their earnest money back unless they specifically required the seller to deliver a home of at least a certain number of square feet with a specific method of computing that square feet.
This is a bit off subject but along the same line. My husband is a builder and he had a client try and hold him to the estimate sheet he had turned into the lender. This sheet gives estimated prices on each category of construction on the house. What mattered is the bottom line, the overall contract price, not each individual item that goes into the construction of the home. He said he would build the home for X amount of money and that is exactly what he did. He posed that same question to the client, If it had cost more for that particular catagory, would you expect me to come to you and ask for more money to make up for my loss? Of course not!
We have also seen the homes my husband has built miraculously grow over time. The blueprint says the house is x amount of square feet and that footage was written into the contract when they purchased the home but somehow when they placed the home back on the market a few years later it has grown by a few hundred feet. Gee, should my husband go back to the client and ask for more money because the house is bigger than what it was when he built it?
You can reach Ilyce R. Glink at: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or www.thinkglink.com
Sandy Mitchell: sandy@thekellygroup.net or 503-502-6408
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