Did The Realtor Lie To Me??
Updated: Feb 12
You went under contract on your new dream home. A beautiful bilevel sold to you as 1,900 square feet, four bedrooms, and two and one-half baths, according to the Realtor and their MLS listing. A couple of weeks later, you receive a copy of your appraisal and cannot believe what you see. "Wait!? What happened!? The appraisal says the house is only 1,300 square feet! And it says it is only three bedrooms and one and one-half baths?! How can that be? The appraiser doesn't know what they are doing!"
This can be quite jarring and upsetting when you thought you were getting a much larger home. Though jarring, the appraiser was correct. The appraiser physically measures each home to proper standards. In this particular circumstance, the recreation room, one bedroom, and one full bath in the lower level/basement/below-grade area, were sold as part of the gross living area. Wouldn't you pay more for a 1,900-square-foot home than a 1,300-square-foot home? I think it's safe to say, most would. And parties who get paid on a commission basis know that. But, a noteworthy reduction in square footage like this can have a huge impact on the value of your home.
Let me preface this next paragraph by stating that no, I am not saying I believe that all Realtors are bad or play dirty. The field is full of many wonderful, kind, competent Realtors. But sadly, the square footage game is a very common practice by many Realtors. To intentionally, falsely list the homes as much more than they are, solely to pull in more interest. It is called deceptive marketing, aka, false advertising. Intentionally adding basement space, below-grade space, garage space, attic space, etc.......as part of the gross living area to bait buyers into thinking they are getting way more than they are.
When asked about it, many feign ignorance."Oops. Sorry. I didn't know that." Over the years I have taken the time to share with many Realtors what gross living area is and isn't and how basements are not to be counted in the gross living area. To this day I still many of these same agents including the basements in the MLS living area.
In most cases, appraisers measure homes using the standards from ANSI; American National Standards. Regardless of method, basements were never permissible to be counted in the gross living area. (With the rare exception of some homes that are of truly contemporary design.) Space that is basement, levels that are below grade, areas that are unheated/unfinished, etc. are not part of the gross living area of your home. As appraisers, we do weigh and consider the impact that these spaces have on your home, but it is valuated in a different manner and in different sections of the appraisal form.
If you have any questions about your home, an appraiser is a great resource. As I always say, if you need to know, call a pro. Call an appraiser.