An attorney from the California Association of Realtors® advises agents they should NOT measure any house. The main reason is fear of liability. On this advice we absolutely agree!
Where we disagree, is that I say Realtors® should be “responsible” for obtaining accurate square footage data to best represent their clients. If they don’t measure their client’s homes then I say that’s the real liability problem. This is the perfect chance for Realtors® to step up and be responsible for protecting the American public.
I personally think no real estate agent should ever measure a house. There should hire an appraiser or someone trained in measuring sqft according to ANSI. Then they can be assured the data is accurate and not be exclusively responsible for the liability. Not only do they need to hire the measurements done, they need to include a DISCLOSURE Form with every sketch in their listing file. They have a disclosure form for every possible situation except the one number at the heart of every home valuation, square footage. It seems to be all about “CYA.” That’s not a good reason to not uphold your duties to be the public, as stated by your own Code of Ethics.
A sample form that helps to protect homeowners and agents is available at email@example.com.
If the agents don’t have the house measured before they suggest a listing value of their clients, it means they are creating home values based on information they are pretty darn certain is inaccurate. That seems unethical. That is knowingly using bad information to price someone’s single, largest, lifetime investment. How does that meet with the Realtor® Code of Ethics?
Standard of Practice 11-1
When REALTORS® prepare opinions of real property value or price they must:
1) be knowledgeable about the type of property being valued,
2) have access to the information and resources necessary to formulate an accurate opinion, and
3) be familiar with the area where the subject property is located
unless lack of any of these is disclosed to the party requesting the opinion in advance.
When an opinion of value or price is prepared other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, the opinion shall include the following unless the party requesting the opinion requires a specific type of report or different data set:
1) identification of the subject property
3) defined value or price
6) basis for the opinion, including applicable market data
8) disclosure of whether and when a physical inspection of the property’s exterior was conducted
9) disclosure of whether and when a physical inspection of the property’s interior was conducted
REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.
Standard of Practice 12-10
REALTORS®’ obligation to present a true picture in their advertising and representations to the public includes Internet content, images, and the URLs and domain names they use, and prohibits REALTORS® from:
2) manipulating (e.g., presenting content developed by others) listing and other content in any way that produces a deceptive or misleading result;
A misleading result could certainly be a real estate value based on a price-per-square-foot amount, which is based on inaccurate square footage details taken from public records, which are known publicly to contain significant errors.
The bottom line is it’s time for Realtors® to step up and take responsibility. Or, perhaps they should reduce their fees?? After all, in the beginning of the Realtor® organization and the MLS, measuring square footage was a typical part of the job and no agent would prepare their client a CMA without first verifying the number at the heart of every residential valuation.
The state attorney is worried about liability. I say where are the lawyers that should be suing agents who knowingly use inaccurate data to either over or under price their client’s home, costing them thousand or even tens of thousands every day in the cray world of price-per-square-foot real estate pricing mentality? It’s time to step up to the plate and step back in time to quality data and accurate square footage details in the MLS information.