* Or, ‘Why square footage listed on the MLS points toward the truth, but might not be truth itself’.
Just me being silly before leaving for my “What is ANSI?” class at Austin Board of Realtors
I am pretty sure the 100-foot tape measure in the video is older than I am, by the way. Here’s bringing you information from Friday’s class on measuring square footage…
Where does that square footage number come from on a home-for-sale listing? It will say something like “according to tax records” or “according to owner”. But, really where did the county appraisal district or the owner get that number?
If the house was originally built as part of a subdivision of houses going in pretty much all at once, the builder probably had blueprints for 4 or 5 different house designs and the house in question came from one of those blueprints. Did the builder follow that blueprint exactly, or are there variations in the homes that all came from the same blueprint? Who knows? But, the county probably used the builder’s blueprint numbers to assign a square footage to the house in question.
If a house has no blueprint that is available, the county tax appraiser can come out and, using a wheeled device running along the ground, measure the footprint of the foundation to the nearest foot and calculate the square footage of the foundation from those measurements. (How exact do you think that is?) And, if the house has a second story, the footprint number is doubled to represent an approximation of the size of the house. Imagine if the upstairs portion of the house is a loft with only half the square footage of the room below. Or, imagine rooms under the sloping roofline that are scarcely high enough to stand up in. The county appraiser does not know these things just by looking at the house from outside, so the square footage calculation might be off considerably from the area a person can actually walk on inside the house.
Even square footage that was calculated by a licensed appraiser hired by a previous seller or by a previous lender might be a deceptive number. Until fairly recently, there was no standardized way of measuring square footage. Some measurements would include the thickness of interior walls in the total square footage and some would not. Some would include staircase space, some not. Some older measurements might include square footage of upstairs rooms with only 6-foot ceilings, while newer measurements would not. And so on and so forth.
A licensed appraiser is required now to use methods spelled out by the American National Standards Institute. Which is a good thing, because we can compare two different house sizes measured recently by licensed appraisers.
But, if we are looking at the work of an appraiser from years ago, we simply don’t know how the square footage was calculated at that time.
Are you starting to be a little skeptical about how personally important that number is on the builder’s marketing material, or on the MLS listing? Yeah, me too. That’s why you always hear me answer the square footage question with exactly what we know, “1843 square feet according to the tax records“, or “5220 square feet according to the builder.” I am not trying to evade the question as much as I am emphasizing the approximate nature of that number we’re all looking at.
How does this affect you? Buyer or seller, you are gonna want the buyer’s lender to see an appraisal that matches what the buyer is offering for the house, right? I mean, what if the appraiser comes up with square footage that is considerably less than the square footage that has been on the county tax records all these years? The appraisal might not match what everyone has been thinking that amount of square footage should be worth! Either the buyer coughs up more funds from her pocket, or the deal falls through, ‘cuz no lender is going to make a loan greater than the ascribed value of the house.
- If you are a seller and the square footage listed on the tax records, or from another source when you bought the house, seems really off from what you are observing when you are in the house, you might want to hire your own appraiser to make the calculation using the most up-to-date methods. Why risk going down a long road toward closing a sale when the whole thing comes to a screeching halt because the buyer’s appraisal is lower than the contract amount?
- If you are a buyer and you are running around trying the get the most square footage for the dollar, how are you going to know when you’ve found that touchstone? Can you trust the exact number you are seeing on the listing?
Buyers: calculating the value of a home in your mind should not begin and end with price per square foot. I hope you see by now that this is not a trustworthy number! Like I said, that number is a signpost that points toward truth, but it is not likely to be Truth itself.
Sources: Candy Cooke’s class on “What is ANSI?”
Square Footage- Method For Calculating: ANSI Z765-2013 from Home Innovation Research Labs