Institute of Housing Technologies
Improving the Real Estate Information Network
Example #1 - 170 Pine Lake Dr. - Whispering Pines, NC
Sold $250,000 - 3,000 concessions - Net Sold Price = $247,000
2,300 sqft in MLS - $107.39 per-square-foot
2,020 sqft in Tax Recds - $122.28 per-square-foot
$14.89 per-square-foot difference
Math & Square Footage
Changing Home Values
Example #2 - 37 Shadlow Lane - Whispering Pines, NC
Sold $226,500 - $3,000 concessions - Net Sold Price = $223,500
1,968 sqft in MLS = $113.57 per-square-foot
1,880 sqft Tax Recds - $118.88 per-square-foot
$5.31 per-square-foot difference
The next house listed for sale in this neighborhood measured 2,188 sqft. The tax records for that same house showed 2,012 sqft. With this information, let's see what could happen. And remember, this is real money and errors like this happen every day all across the country. When it's your money, why take the chance? Size does matter...
Example #1 came in with a difference of $14.89 per-sqft, depending on which square footage total you use. Remember, an appraiser (or agent) can use either number, or a totally different number for that matter (if they measured the house themselves or got it from another appraiser). There is no requirement to use one square footage total over another. No one ever asks a question about the square footage.
If the next house is 2,188 sqft, at $14.89 per-sqft, that would create a difference of $32,579. So, a listing agent or an appraiser could change the value of this house over $30,000 simply by changing the square footage total they use in any comparison. And, any total they use is considered from a "reliable source." In all of which, they would not be held responsible for any discrepancy. So, if it's your house and the value comes in about $10,000, $20,000, or even $30,000 low, it's no body's fault - ops, just one of those things. Write out that check and see if it would matter to you...
And this is just one small example of the possible variations on this home's value based on which square footage total gets utilized. It leaves a lot of "wiggle room." Not something I want to hear about my home's value.
Even a $5.00 per-square-foot error can mean between $10,000 and $20,000