Yes, it’s time for real estate agents to start accepting responsibility for providing accurate square footage details to all prospective buyers, other agents and to appraisers who all depend on the data they provide. No agent is required by law to measure a house. But, in most places, “if” an agent provides it, it must be accurate and that means it can’t be taken from tax records.
When an agent meets with a seller to provide a CMA, they can’t do their job properly without knowing the true square footage of the home. We live in a price-per-square-foot world and the vast majority of real estate agents use a price-per-square-foot formula to calculate a home’s value.
While they all understand this simple formula, they are not taught the importance of quality information. Far too many agents (and home buyers and sellers) believe the myth that the local tax department provides the “Official Record” of their home’s square footage. They believe even if the information is wrong, it’s probably not enough to impact the value. Wrong! I can’t stress that enough. 100% wrong. It obviously depends on your location housing styles and ages, and other factors such as home with upper levels and basements (which are the worst offenders). After studying this topic for over fifteen years, I have thousands upon thousands of examples that show just how many and how large the square footage errors are in public records. And remember, the tax department does NOT need precise square footage details. A few lazy Realtors® started using the square footage in tax records in the early nineties and it spread like wildfire.
What it causes is over and under priced homes, low appraisals, and cheats consumers out of millions upon millions every year. Yet the National Association of Realtors® continues to ignore this problem and could easily fix it with one new rule. One rule that requires all Realtor® members to provide accurate square footage details, based on a nationally mandated measurement standard, into every MLS listing. Consumers are currently at the risk of the state they live in, their local MLS system, and their individual agent’s knowledge on this subject.
Maybe this lawsuit in California (Horiike vs Coldwell Banker) will help draw more attention to this matter and bring other attorneys into the action. For right now, until the legal community holds real estate agents liable for providing inaccurate square footage, consumers will continue to get cheated every day. It’s time to bring about a change.
MLS systems all across the country are riddled with inaccurate square footage details, and those details hurt buyers and sellers. Also, any automated valuation model can only be as accurate as the square footage details. They all seem to use the same information from the local tax department. If you use a formula that only uses two numbers and one of those numbers is wrong, all your valuations are also going to be wrong. If $5,000, $10,000, $30,000, $50,000 and much more doesn’t matter to you, go ahead and trust computerized valuations.
However, for a six percent fee, you would make sure your agent measures (or has your home measured) BEFORE they ever calculate a price. Otherwise you can be assured you will be leaving money on the table.