Auctioning Your House? Being Without Worry Equals Having Your House Personally Measured

2007-05-20 Word Count: 624 Category: Taxes

Either auctioning your home solo or listing your home with a real estate sales person, the important ingredient to a quick deal is an objective depiction of your home’s material features in writing. A necessary stage in the procedure of having an objective depiction of your home is having an objective calculation of gross living area, a necessary stage that is frequently lost on some. As one of the first stages in determining a home’s listing amount an real estate sales person will provide a Comparative Market Analysis (CMA) which details selected transactions in the neighboring area. However, without an objective calculation of your home's living area, the real estate sales person’s CMA will not be very helpful.

In the USA, the majority of realtors establish the price per square foot of a home on livable area size. Gross living area is known as the part of a home which is heated and cooled, immediately entered through the inside of the home and being of the quality of construction identical to the original home. Gross living area is measured from the outer walls, not from the internal part of the house. All realtors are to adhere to the ANSI (American National Standards Institute) rules for single family residential structures when measuring home area, which recommends actual measurement.

Also, one of the largely common lawsuits in real estate today is distortion of home size. I’ve been to houses under contract where the home’s contents are packed up and the seller is ready to move only to be informed that their house’s living area was not objectively embodied to begin with. The purchase document then has to be renegotiated or is absolutely dead| with no obligation for the buyer to go on with the sale. The seller’s home sells for thousands of dollars below the original price. For this reason you should not permit the agent to declare your living area based on county records, an old set of plans (which can and are altered sometimes during the years), or an estimate of what the typical home size in your neighborhood.

Here is an illustration: A 3,000 square foot home is listed for sale @ 111 Deer Park Drive. The home is listed at $120/sf x 2,000sf = $240,000. Rather than actually measuring the home to know an objective living area, the GLA was calculated relying upon county records. The home receives a buyer for $240,000. However, the appraiser turns in her appraisal showing 1,840sf and an appraised value of $220,800, some $19,200 less than the sales price. The sellers are informed that they will need to renegotiate the purchase amount because the living area is actually 1,840sf, not the stated 2,000sf. The sellers are angered and sue the former sellers for falsification of living area.

Can this actually occure in transactions? Yes and it does. For this reason it is so important to have your home measured by the person listing your home, whether by owner or by real estate sales person, or preferably, by an appraiser. After doing so, you will have actual evidence of your actual living area.
Unlike a real estate sales person, an appraiser has no vested interest in what amount for which the home sells. Appraisal fees are determined by complexity to develop the report and not a percentage of the selling amount. Therefore, a professional appraisal can often help homeowners make the best decisions setting a reasonable sales price for their homes size. Whether you’re thinking of listing FSBO or through an real estate sales person, it is always a great idea to get an appraisal prior to listing your house.

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This article was written by William D. Cobb with the assistance of R Chandler Smith. William heads Accurate Valuations Group and has been licensed as a real estate appraiser for 15 years now primarily in the Greater Baton Rouge, LA area. For more information on William D. Cobb and Accurate Valuations Group, visit Baton Rouge Appraisal. R Chandler Smith is an established real estate expert in the Houston area. He maintains Houston Real Estate Appraiser