200 square feet less? Thousands of dollars. A buyers agent? Priceless.

By
Real Estate Agent with Keller Williams Realty - Lakeside Market Center

***Shameless self promotion of the value of a buyer agent ahead***Larger house


I've been having a wonderful time over the last couple of weeks with young buyer clients.
They are first time home buyers in Macomb County. The interaction has been very good.  They are such a nice young couple, eager, and knowledgable.
I now know what makes their eyes light up and what makes them cringe when viewing homes.  They also are keenly aware of the fact that I work for them and not for the home sellers.

Over the weekend we viewed a home that has been on the market quite some
time,
and recently had a nice sized price reduction which put it into the "let's take a look at it"
range for my clients.   The home was stunning.  Simply stunning. One of the few move-in condition
homes I've seen all year.  I advised my buyer clients as I  always do:  If it is the one for you, make
an offer.  Don't take a chance on someone else getting it while you mull over a decision by days or weeks.  By the time we arrived at the next home on the list they had made their decision. They wanted to write an offer on the home, a generous one at that. We made plans to meet at my office the next afternoon.

That evening though something had been nagging at me.  As I thought more about
the home I realized it was probably not the square footage it had been reported to be,
Smaller house
and determined that we would head back to the house the next day before writing the
offer to measure it ourselves. 

The next day I arrived at the office earlier than my clients and while I was reviewing
the disclosures that had been faxed over I also saw included a sketch of the property
lines with the house also on it.  Oh my.  Measurements included!  My trusty calculator
determined the square footage of the house:  200 square feet less than what was
reported to both of the multilist databases. 
(To double check this I went back to the
home and measured it myself.)

Short version of what took place next:
  My clients wrote a generous offer based upon
the actual square footage of the home, condition, and closed comparable sales.  We
attached a letter to the offer explaining why it was coming in lower than I'm sure the
seller expected, explaining about appraisal issues and the fact that in this market
not only are appraisals a true concern but also a buyer should not be paying more than
fair market value.

The offer was soundly counter-offered to darn near close to full asking price.  My clients
have made a very wise decision this morning to reject the counter offer and move on to
viewing other homes.

The difference in a 200 square foot discrepancy?  Approximately $10,000 to $15,000
in value to the home in my opinion based upon the comparable sales.
 

Had my clients been unaware of the square footage shortage, they would have spent approximately
$300 for a home inspection and another $350 or so for an FHA appraisal.  When the appraisal fell
through (as I am convinced it would have) that $625 would have been money wasted.


The value of a buyers agent?  Priceless.  A buyers agent works on the behalf of the
buyer.  Daily.  With every home. 
 

 

I will be contacting both multilist associations and reporting this discrepancy to them. I cannot
in good conscious let another buyer unknowingly make an offer on this home assuming it
is the square footage reported.


© Kris Wales RE/MAX Advantage 1, Inc. A Macomb County MI real estate agent

 

 

 

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Topic:
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Tags:
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Rainer
340,913
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI

Michael:    Two reasons:  It was Mothers Day and he already told me the day before he would not be working.  Secondly: The listing agent is the one reporting the square footage and obviously had the same sketch the he sent to me.  I also included a letter (which I won't include here) explaining the reason why the offer was monetarily the way it was.     BTW, it is still in the databases with the incorrect square footage.

May 13, 2008 02:22 AM #2
Rainmaker
568,004
Pam Joffe
Solaris Realty - Tampa, FL

Good morning Kris - You did a great job protecting your clients. Square footage can be tricky to measure, I had an issue with a home where we had two appraisals and the square footage varied between the two by almost 250 square feet.

May 13, 2008 02:27 AM #3
Rainer
340,913
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI

Solaris Realty:   This one wasn't tricky at all to measure ( a ranch).  Some homes I agree can be tricky.  This one was a breeze.

May 13, 2008 02:29 AM #4
Rainer
51,690
Lori Gilmore
Baird & Warner Real Estate - Joliet, IL
Realtor - Will County Illinois

Kris -- Great job on behalf of your clients. . .good luck in finding them the "perfect" home.

May 13, 2008 02:34 AM #5
Rainer
93,046
Andrew Trevino
ADT Real Estate - Wilkes Barre, PA
Wilkes-Barre Homes For Sale

Kris,

Great job checking out that SF. I just put one under contract where the property was reported as 500SF smaller than it actually was!! That was a costly mistake for the seller...and a great opportunity for my buyer. I guess it goes both ways, but it's our duty to check those things. Thanks for the post. I'll bet you that the house will show a price drop again to reflect the actual SF.

May 13, 2008 02:47 AM #6
Rainmaker
2,791,596
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Wow, Kris, What a wonderful job you did for them.  I hope many people in your area read this and contact you, it seems you don't miss a thing.  I'm sure your clients are very grateful.

May 13, 2008 04:50 AM #7
Ambassador
2,758,601
TeamCHI - Complete Home Inspections, Inc.
Complete Home Inspections, Inc. - Brentwood, TN
Home Inspectons - Nashville, TN area - 615.661.029

The world needs more good real estate agents like you Kris. I wish that we had more down here.

May 13, 2008 11:57 AM #8
Rainmaker
786,877
Mike Jaquish
Realty Arts - Cary, NC
919-880-2769 Cary, NC, Real Estate

Kris,

Great job to be on top of it and avoid the clients' wasting cash on inspections and appraisal.

Too many agents overlook that cost to their clients, IMO.

May 13, 2008 12:51 PM #9
Ambassador
920,351
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

Kris, you know I am a firm believer in knowing the true square footage. Yikes, that is huge, wonder if the listing agent will change it now that she knows ?

May 13, 2008 02:19 PM #10
Rainer
53,248
Marlene Scheffer
Realty Station - Bremerton, WA
Realtor to Kitsap County, WA

Kris, nice catch!!!!  What a great example of the value of a Buyer's agent!

May 13, 2008 05:19 PM #11
Rainer
340,913
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI

Lori:  We're going back out tonight to find them a wonderful home.  They're a great young couple and "determined" is in all of our vocabularies.  Thanks so much.

Andrew:  Wow, that was a good find for your clients.  Shame on the sellers agent for not noticing 500 square feet difference.  (That IS alot!)

Carole:  I won't spend my clients money needlessly.  This could have been very costly for them.  Thank you for your kind words.

Michael:  Thank you. It was nice of you to say that.

Mike: Like you, I take the time to investigate things.  Thanks.

Missy:  As of just a few minutes ago it still wasn't changed.  This wasn't an over 3000 square foot house where the 200 square feet wouldn't make much of an appraisal issue.  This home is under 1500 square feet. In that size home that is a whole family room missing, or a dining room and larger bedrooms. HUGE in my opinion to an appraiser.

Marlene: "Nice catch" is what the mortgage lender said when I updated him :-)  Thanks Marlene.

May 13, 2008 11:07 PM #12
Rainmaker
281,679
Mike Mitchell
Real Living Kee Realty - Saint Clair Shores, MI
REALTOR (R)

Kris, great job. This post should be used by NAR to promote buyers agency. I'm sure your clients are grateful. Good luck, I know you'll find them their perfect home.

May 14, 2008 01:04 AM #13
Ambassador
1,119,351
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com

Thank goodness for a good agent who looked out for her clients even though they loved the house.

May 14, 2008 10:02 AM #14
Rainer
340,913
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI

Mike:  We're back in the saddle again Saturday and quite of few of the homes we'll view appear to be something they will like.  Thanks Mike.

Russ:  Thankfully they are realistic and are tackling the disappointment very well.  They're such smart young people - no way did they want to overpay for a home.

May 14, 2008 10:56 PM #15
Rainer
86,590
Ron Parise
LocateHomes.com - Cape Coral, FL

I wonder where the square footage came from/ In my county, when we fill out the mls form on line, the square footage is pre-populated from the tax assessors database. The figure in the mls could be an honset mistake...but I agree it should be  a factor in your negotiating........but not the only factor If as you say "The home was stunning.  Simply stunning. One of the few move-in condition
homes I've seen all year" it might be worth paying a little more than the going rate per sq ft, because each of these square feet are "stunning"   It would be a shame to miss such a home over a few dollars

May 18, 2008 01:36 AM #16
Rainer
111,372
Toronto's 2 Hounds Design: Decorating + Staging
2 Hounds Design + Home Staging - Toronto, ON

I'm in Canada so forgive my ignorance: why would an appraisal with a difference of only 200 sq.ft. cause a property to fall through? You mentioned the property was stunning and the only one you'd seen so far this year that was move-in-ready.

 

May 18, 2008 07:53 AM #17
Rainer
340,913
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI

Ron:  The square footage was an estimate on the listing agents part.  When I delved deeper (after I had measured it) the county records also showed the lesser square footage.  (The listing agent should have looked at that when he listed it, or measured it himself.)  Also, even though it was stunning there would have been appraisal issues - it wouldn't have appraised out at purchase price in my opinion.  In our area the appraisals are going through a 2nd review for the most part, and this home also was not on a basement but on a crawl space.  Double whammy. My clients would have spent $$ for a home inspection and $$ for an appraisal only to have the loan probably not go through.  That's tough on buyers, especially first time home buyers. 

Dane:  Whether I like it or not the foreclosures that are being sold are the new comparable sales.  (There are so many of them that the appraisers have no choice but to use them)  The home was also on a crawl space and not on a basement as most of the comparable sales homes.  The double whammy of the lower square footage combined with no basement would have made an appraiser say "What are they thinking???" If the home was truly the square feet advertised, I think we would have cut it close with the appraisal because of the outstanding condition balancing out the no basement issue.  But to overcome both would have been in my opinion a long shot to no shot at all.

May 18, 2008 09:21 PM #18
Rainer
111,372
Toronto's 2 Hounds Design: Decorating + Staging
2 Hounds Design + Home Staging - Toronto, ON

Wow, sounds like they were luck to have you. Doesn't sound like they'd have been too happy if they'd actually gotten the house then discovered the missing sq.footage! Thanks for the 911 on it works. :)

BTW, my husband, agent and myself were looking at a house for the 3rd time this past Friday...we were considering making an offer. Well, I was standing in the second floor looking at the bedrooms trying to figure out which 1 was the small one which would be the 'guest' room...but I kept getting 2.

Turns out it had a bonus 5th bedroom and not one of us had clued in. Imaging the looks on the agent's face and my husband when they realized I was right.

;) We bought the house with the bonus bedroom that day!

May 25, 2008 02:41 PM #19
Rainer
755
Don Hancock
Real Easy Tools - Nampa, ID

Great work!!!  Is measuring the square footage a standard practice for you, or do you do it when you have that gut feel that something is not right?  I am surprised at the differing opinions in the Boise area regarding the importance of checking square footage with each transaction.  There are many collogues that measure and calculate it with every house, and many that just flat out will not touch it with a 10' pole because of a fear of liability issues.  What is the general consensus in your areas? How many people do it, and for those who don't why don't they?   

Sep 02, 2008 05:31 PM #20
Rainer
340,913
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI

Dane:   Loved your personal story about the added bedroom :-)  I'm so sorry I missed your comment earlier.  Thank you for telling me about what happened with you and your family.

Don:  No, it's not standard practice.  I do it if I have a feeling that it is off by more than 50 square feet.  In this case it was off by quite a bit and I knew that there would be an appraisal issue.  Also,  I always remind my buyer clients that the square footage stated in the listing information is estimated.  We can measure, and the appraisor will measure it.  If having accurate square footage is important to them I suggest they measure it prior to making an offer.

Sep 02, 2008 11:00 PM #21
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