ANN HOKE, Keller Williams Realty
Posted: Sunday, April 4, 2010 12:00 am

In today’s market, every little detail matters when it comes to determining the monetary value of a home.

But one overlooked area may cost you greatly if you purchase or have purchased a home where the seller, intentionally or unintentionally, misrepresented or overstated the square footage. What you may want to ask is “Does this home measure up?”

Why is this important?

Most buyers and every appraiser look at common denominators when setting the value of a home. To the chagrin of many – dollars or price per square foot is often the best way to begin estimating the value of a given home. For example, if you have a 2,100 square foot home that you hope to sell for $210,000 (or $100 per square foot), imagine the disappointment when you learn that you home has only 1,900 square feet and its theoretic value is $190,000. Instantly, you’re equity has dropped $20,000.

The square footage of a home listed for sale is normally stated in the MLS listing along with the source of origin – who supplied the measurement.

The square footage may have been supplied by the owner or builder; taken from construction plans, appraisals or tax records; or measured by the real estate agent or a qualified professional (which could be an agent).

Without going into the details, the reasons behind errors in calculating and reporting square footage abound. The most reliable course is to have the home professionally measured if the square footage is important to you.

When our team lists a home for sale, we measure the square footage if we have reason to doubt that the “reported square footage” is more or less than the actual.

Over the last few years, in our evaluation of homes being prepared for sale, we’ve run into situations where prospective sellers are saddened to learn that the home they purchased in previous years is smaller than they were led to believe. In a couple of cases, they overpaid too for the home compared to comparable homes – solely because they relied on the published square footage – and won’t recover their loss.

While no legally binding official rules exist, the home building and real estate industry generally abide by the ANSI Standard.

According to ANSI (the American National Standard Institute, which works in conjunction with the National Association of Home Builders Research Institute), a finished area is defined as "an enclosed areas in a house suitable for year-round use, embodying walls, floors and ceilings similar to the rest of the house."

The ANSI standard states that vaulted ceiling areas open to the floor below or oversized stairwell openings should not be included in total square footage. Probably the most common error that we see is miscalculating square feet in bonus rooms. Floor area with ceiling heights sloped to less than five feet cannot be counted in the total.

So, whether you’re looking to buy or sell a home, now or in the future, if you have a question about the square footage … don’t be afraid to ask. It’s always better to learn that the house you purchased is larger than you thought. The alternative of paying more for less can be painful.

Ann Hoke leads the award-winning team at Ann Hoke & Associates (affiliated with Keller Williams Realty). For more information or comments, contact her at 397-4024 or ann@annhoke.com.