Square footage discrepancy - earnest money back? (Howe: sale, real estate) - Austin - Texas (TX) - City-Data Forum

avidhomebuyer · 10-19-2009, 10:13 PM

I am in contract on a resale house. The current owner has bought it from a builder. It's a 2-storeyed house. The square footage on the bank's appraisal is approx 100 less than the MLS listing; and the square footage according to the blueprint of the builder again is 100 less than the bank's appraisal. However, the bank appraised the home up to the sale price that was negotiated in the contract. Now, I am concerned that nearly 200 square footage difference is a big deal. The seller's agent is not willing to negotiate with us, as the option period is already over and he claims that in the MLS listing he has mentioned the source of the square footage correctly (which is tax records). It looks like I may lose totally up to 3.5 K (option money, earnest money, lender fee including appraisal, inspection, etc), if I back out. My contract does not say anything explicit about the square footage.
(1) Is it possible at least to get the earnest money (2K) back?
(2) How far can I really trust the bank appraised value and move forward with buying in stead of worrying about the square feet?
(3) I see that tax records are approximate. But, I can't believe there is a big difference between bank appraiser's square footage and the builder's blueprint square footage. Is this also common?

Thanks in advance !

LongTimeAustinite · 10-20-2009, 05:51 AM

Measure the house and see what the actual square footage is. It may be correct.
There are realtors here that can answer you question more precisely, but I believe they can't keep your money so easily. The contract may or may not be binding but they have to settle that legally first. It would be easier and less costly for them to give your money back and move on.

centralaustinite · 10-20-2009, 07:38 AM

Yes, did the bank appraiser actually measure the sq footage?

Have some one actually measure the house!

You need a good realtor. It can be hard to get earnest money back especially since, I think, the standard contract, states that the seller makes no guarantee of things like sq footage.

Does 200 sq feet really change the suitability of the house for you?

Don't obsess over some price per sq foot calculation, if the space meets your needs and you agree to the price, then buy it!

pbnj07 · 10-20-2009, 07:41 AM

Using price per square foot to come up with an offer is just a way to make an educated estimate of a house's value. You're not signing a contract that stipulates you're paying X amount of dollars per square foot.

If square footage was a concern, you should have paid a few hundred dollars to have it appraised before signing the offer.

Here's the good thing though: when you re-sell, you can use the tax record square footage in your listing as well.

iceshots · 10-20-2009, 08:25 AM

Quote:

Originally Posted by pbnj07

Here's the good thing though: when you re-sell, you can use the tax record square footage in your listing as well.

Or ... use the builder's blueprints, and the smaller square footage to argue for a reduction on property taxes at the next assessment.

If you like the house, you like the house. Its not like you had a 200 sq ft mudroom that isn't there anymore. The house has not changed since you put your offer in.

EllenArlingtonPark · 10-20-2009, 08:28 AM

Is that the only reason why you would not want the house, over 100 sq ft? That sounds pretty frivolous to me. If you are still in your option period, you can get out anyway.

TexasHorseLady · 10-20-2009, 08:40 AM

Quote:

Originally Posted by iceshots

Or ... use the builder's blueprints, and the smaller square footage to argue for a reduction on property taxes at the next assessment.

If you like the house, you like the house. Its not like you had a 200 sq ft mudroom that isn't there anymore. The house has not changed since you put your offer in.

This, right here. Are you buying the house to live in? Is the house the same house it was when you decided that it fits your needs? If you are, and it is, then don't let something like this keep you from buying the house you want.

There are frequently variations in square footage. Things like the builder submitting the plans to the tax office before the house is actually on the ground and then minor changes being made during the building process because the person it's being built for wants them, whether the measurements were taken inside the house or outside the house (that can make a big difference right there if you think about it), whether the appraiser did their math right (I just had a deal where the appraiser measured the house and came up with a different square footage, and when we looked at the appraisal in detail, it turned out that where something measured, say, 4 feet 9 inches, when she did the math, she multiplied by 4.9, not 4.75), any number of things.

If you're trusting the bank appraised value to get you the loan, you can count on it. In fact, if you were paying less than the tax appraisal and wanted to contest your tax valuation to lower your taxes, you could take your appraisal or HUD1 in to the tax office and most likely get it changed with very little trouble, no matter what the square footage actually is.

JustCinco · 10-20-2009, 08:41 AM

The square footage in the MLS Sheet being more than it really is, is not a reason to cancel ang get the earnest money back, specially if the MLS shows the source of the measurment, but if the bank appraisl is lower than the purchase price, you can cancel and get the earnes money back.

CptnRn · 10-20-2009, 09:12 AM

The tax records are not necessarily correct. I found that mine were 150 sf off. They rely on someone else to give them the numbers. If it is a big concern to you, I'd talk to a real estate attorney about it to make sure you are not taken advantage of. It might be worth hiring a surveyor to measure it for you so you know what it is for sure.

nmnita · 10-20-2009, 10:55 AM

Quote:

Originally Posted by avidhomebuyer

I am in contract on a resale house. The current owner has bought it from a builder. It's a 2-storeyed house. The square footage on the bank's appraisal is approx 100 less than the MLS listing; and the square footage according to the blueprint of the builder again is 100 less than the bank's appraisal. However, the bank appraised the home up to the sale price that was negotiated in the contract. Now, I am concerned that nearly 200 square footage difference is a big deal. The seller's agent is not willing to negotiate with us, as the option period is already over and he claims that in the MLS listing he has mentioned the source of the square footage correctly (which is tax records). It looks like I may lose totally up to 3.5 K (option money, earnest money, lender fee including appraisal, inspection, etc), if I back out. My contract does not say anything explicit about the square footage.
(1) Is it possible at least to get the earnest money (2K) back?
(2) How far can I really trust the bank appraised value and move forward with buying in stead of worrying about the square feet?
(3) I see that tax records are approximate. But, I can't believe there is a big difference between bank appraiser's square footage and the builder's blueprint square footage. Is this also common?

Thanks in advance !

Believe it or not, I don't think you have any case. This exact thing happened to us many years ago, but it was after settlement. We were going to sue (the only time in our lives we ever thought of such a thing and it was about 200 sq feet as well) what it boiled down to was, we were content with the size of rooms etc and the actual sq ft wouldn't enter into it. Another thing to consider, there are many ways to measure sq ft. Now, I can understand you contacting a lawyer to see if there is a way you can back out, but don't get your hopes up. Look at it this way, if you like the house, are content with what you saw, I would say, go through with it and enjoy your new home. Our concerns were much like yours, was it worth what we paid and how about re-sale?

Nita