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I have a question - I am due to close on a townhome on Monday afternoon. I have a question because although the appraisal came in at sales price, I just now noticed that the square footage area is almost 200 sq ft smaller than the listing (Both the listing and the tax records say 1793 and the appraisal says 1600). I am already a bit concerned about buying in an appreciating market. All of my contingencies have expired. I only put up $1,000 for a binder deposit. What are my options? I've already read my purchase agreement and it does state that in case of default, the non defaulting party can take the defaulting party to court. Also, the brokers in the transaction are entitled to commission.
Is it common for there to be differences in the square footage between appraisal and listing? If I walk, would it be likely that I am sued? Thanks
It is empty - I'm considering asking my agent to meet with me tomorrow (even though it's Sunday). The home is good for me however I made the offer based on information that was advertised. My primary concern is resale - I will be hurt later down the line because it may not sell, or I may run into a dispute myself with a potential buyer.
Yes, it is common for the listing and tax records to be slightly different. If it bothers you, get real legal advice or learn to live with the smaller space.
I urge you to be sure you understand the HOA finances as those can be deal breakers when it comes time for a special assessment or other problems. All things the sales people can't or won't explain as they are interested in making it to the finish line so they can collect your money. Some HOAs are only okay while others are night mares. Read other posts regarding them.
Brokers, commissioned sales people, will always have the contract written to protect their commission.
It is a big deal for several reasons! Sales price and property taxes!
You should have had a timeframe to back out after appraisal and inspection. Depending on your state law you can still back out.. I suspect that the listing agent took the square footage from the tax records. The inspector is correct because he actually measured. I would have your lawyer address this at closing or BEFORE!!
Take the sales price and divide it by the original square footage to get the price per square foot. Then take that and times it by 200. That will give you the difference that the buyer should drop the price by as you were under the impression you were getting more square feet.
Example:
Home sales price $150K for 1793 sq ft. =$84 a sq ft.
200X $83=$16,600 the seller should lower the sales price by. Otherwise at 1600 sq ft you are now purchasing the home at $94 a sq ft instead of $84 a sq ft!
If you go through with the sale you need to then go to your assessors office with a copy of the appraisal showing the correct square footage so that the county records are updated as property taxes are based off of a homes square footage. The current owners have been paying more on their taxes than they should have been due to this mistake! Unfortunately it's a common mistake and could cost homeowners thousands!!
Why are you assuming the appraisers number is correct and the others are wrong? Go measure it and I bet you will now have a third number. Measuring for square footage is done several ways and they all produce different numbers. I would not be surprised if the listing really was nothing but a what the the tax rolls showed, which could be nothing but what they developer wrote on a form.
Go measure the place so you can really drive yourself crazy when you have a different number from the others.
Thanks for all of the quick replies. Regarding the HOA - yes I investigated that fully. The HOA is sound and the fees have not increased since the community was built (2005). It's also over 90% owner occupied.
Back to my original question, I had 28 days as an appraisal contingency, but only if the appraised value came in below the agreed upon sales price. My due diligence period was 10 days. In hindsight I should have measured the property myself and feel like an idiot for not doing so. I don't even know if I have time to consult a real estate attorney (my closing is at 4pm on Monday). What I'm primarily concerned with is future resale. If I would have known that the house is smaller I would have never made the offer that I did.
Thanks for all of the quick replies. Regarding the HOA - yes I investigated that fully. The HOA is sound and the fees have not increased since the community was built (2005). It's also over 90% owner occupied.
Back to my original question, I had 28 days as an appraisal contingency, but only if the appraised value came in below the agreed upon sales price. My due diligence period was 10 days. In hindsight I should have measured the property myself and feel like an idiot for not doing so. I don't even know if I have time to consult a real estate attorney (my closing is at 4pm on Monday). What I'm primarily concerned with is future resale. If I would have known that the house is smaller I would have never made the offer that I did.
Then call your attorney first thing Monday morning (since your closing is as 4pm) and ask what your options are. Laws are state specific and no one here can give you legal advice anyway.
What I'm primarily concerned with is future resale. If I would have known that the house is smaller I would have never made the offer that I did.
Let em ask you this, Did you have comps of other units in the complex? Was your price based only on those comps? How did the comps square footage stack up to your place?
If you factored in the square footage of the comps in your offer price, did you have those units measure to determine if their listings info was correct?
I would also note that the SF here is what the county assessor says it is. And it is not what people thing...it is actually the outer parameter of the house less the garage.
So the appraiser may be correct but legally wrong. And that happens. Other measurements are things like the real avaiable living area that is cooled and heated...but that is not the building SF here and some places.
So first thing is to decide what is being measured.
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