Institute of Housing Technologies
Improving the Real Estate Information Network
Appraisers from all across the country told us; “Agents don’t measure houses. They take the square footage info straight from the tax department. It’s just the way it’s done these days.” The square footage in tax records is notoriously inaccurate. Everyone knows it, but they use it anyway. Getting the accurate square footage details is NOT the tax department’s responsibility. Listing agents have always provided square footage. At least until they discovered online tax records. In the mid-nineties, everything started to change and it has spiraled downward until it is totally out of control. The MLS is NOT the source of real estate information it once was. Now, it is a reflection of advertisements, painting pictures to sell homes. Important things, like square footage, often show only the details listed by the local assessor’s office. The MLS was once the “most trusted source of real estate information in the world.” Now, it is more an advertising website, not the “members only” site it once was, but published for the public. Like hundreds of others; all of which use the property details listed from public records and who are all fighting to attract home buyers - Zillow, Trulia, Yahoo, etc..
The entire home valuation system is based on the simple formula, price-per-square-foot. A formula that only uses two numbers, the home’s size and sales price. But, no one seems to think the size or square footage is very important these days. Wrong; you can’t have it both ways. If you are going to use a price-per-square-foot formula to price houses, you have to use accurate square footage. Just like the CMA’s created by agents using inaccurate square footage produces wrong listing prices, the same problems happen with appraisals. When MLS reports inaccurate square footage, appraisals use the wrong info to compare homes and values come in too low (or sometimes too high, making a seller lose their cool!). With wrong square footage details, home prices are wrong. This is not that complicated. Until we come up with a new way to price real estate, Realtors® need to provide accurate square footage details. No agent needs to measure any listing. However, if you take the listing you should take the responsibility of having the house measured right; before you talk about the price. Until we stop using a price-per-square-foot pricing system, or start getting this info right, low appraisals are going to continue to escalate.
Are You Getting the Full Value for Your House?
Price-Per-Square-Foot. Who's Square Footage Number?
Up to one-third of all transactions are being affected by low appraisals. In a market with fewer transactions already, we can’t afford to lose any. This is a fight for survival!
MEASURE IT FIRST OR PRICE IT WRONG!
If you want to get the full value for your home, make sure it is measured before you discuss the price. If you don't, you may be leaving money on the table. The market is low enough and you don't need any extra help bringing the value down. Get the full value for the fair size of your home. Ask your agent if they measured the house, had someone else measure it, or if they took the square footage details from public records. If they are using tax records, find a new agent. It's your money...