TrueGotham TV Explores Square Feet: Episode Five

Last week in our 4th episode of TGTV’s 5 part series on Square Feet we delved further into understanding why consumers can’t seem to get an accurate approximation of square footage for the properties that they are seeing.

In our final episode of this 5 part series our panel discusses possible regulation of methodology and approximation of square footage with suggestions on just who should police those responsible for overstating and how they could go about doing so.  Check it out:

As I stated last week, I could do weekly episodes on this topic forever (or at least until the problem went away) but I’m eager to move on to other interesting content.  The surprising conclusion that I have drawn from this eye-opening series is that the methods of measuring are already relatively standard (with the exception of new development condos) and the discrepancies in stated square footage almost always come from me and my colleagues. 

The first step to correcting these gross inaccuracies is to hold accountable those who overstate square footage by a certain amount (do we say +-5%?).  I believe that all real estate agents should be mandated to have their properties measured by an "approved" entity (licensed architect, floorplan illustrator, appraiser).  Furthermore, they should be required to share that precise measurement with the consumer.  In time, I believe you would see fewer discrepancies and more honesty surrounding stated square footage. 

Exaggerating square footage isn’t salesmanship, it’s lying.

5 Responses to TrueGotham TV Explores Square Feet: Episode Five

  1. avatar Caveat Emptor!! says:

    I’m in this exact predicament right now. We saw a place we liked a few months back, marketed as an 850 sq ft 1 BR, with a very awkward layout. We are going to close on the apartment in a month or so, however I just got back the appraisal and its barely 700 sq ft.
    Of course the brokers (I had a buyers broker as well) stand by their disclaimer, meanwhile an exact unit on a different floor that sold a few months prior was marketed correctly at approx 700 sq ft.
    anyone have any suggestions as to what recourse I have?
    and make sure to bring your tape measures…

  2. Why didn’t you measure before signing contract? Buyers broker should have told you about other sale but unfortunately I think it’s a case of buyer beware. If you learn of any recourse, please come back and let us know.

  3. Great series on the overstated sq/ft of Manhattan real estate. I’ve been following the series since you started and completely agree with your statements and conclusion. I believe there is a standard method to measure every property and realtors need to be held accountable for the overstating of sq/ft.
    I have been a Realtor with Royal LePage for nearly 11yrs now, and I am still amazed within our industry and how many times I see over stated sq/ft on residential listings. Within our Realtor MLS program we have a property history option to easily see the entire history on any MLS property. If I were to pick any 10 listings from that data base and pull the entire MLS listing history for each property possibly only one listing might have a consistent square footage over the entire property history.
    Calgary is no were near the price per sq/ft as Manhattan, but if you take into account the average home here is aprox $476,000 and the average price per sq/ft is aprox $317 per sq/ft that adds up to a fair amount of money when the size is over stated 50 – 100 + sq/ft. In some of the larger Calgary homes between 1,800 to 2,200 + sq/ft the overstating of size seems to be even more of a problem. It is not uncommon to show one of these homes and pull the property history and see a variance of sq/ft between 200 – 450 sq/ft. I was in a property the other day measuring it to put on the market later this month, and the previous listing history was all over the map. Over the lifetime of the property there was no additions added and in the first MLS listing it stated 1,850 sq/ft, in the second it stated 2,050 and in the third it sated 2,280. Myself and the home owner measured the property three times in every way possible and the sq/ft each time added up to 1,860. I later confirmed our sq/ft off of original blue prints provided by the home owner. This property was purchased in 2004 for $245,000 when prices were considerably lower, but even at that time that overexageration of sq/ft left the buyer out $10,080. In today’s market it would be more like $21,000 thousand if listed at the last listings sq/ft. I am not sure how many buyers like to leave that kind of money on the table.
    I think a large part of the problem here is Realtors are getting complacent, or to be completely honest just flat out lazy when they list a property. I would safely bet that 50% – 60 % or more of Calgary Realtors take the last MLS listings sq/ft and input it into their own listing and advertising. Some even go that extra mile by adding 5% or whatever they feel like at the time to make the numbers work. I believe all these poor business practises are the reason why Calgary homes mysteriously keep growing in size like weeds each time they are relisted. If you bought a 2,000 sq/ft home in 2006 and list it with the right Realtor in 2008 the total sq/ft might have increased to a amazing 2,100 without even doing a thing to the property. Imagine that your net proceeds just increased by a whopping $31,700 (aprox) not to mentioned the natural appreciation of the real estate. This is just an example, but you get the idea I am sure.
    Currently to my knowledge in Canada there is no sq/ft police out there and most of the time the only way this problem gets brought to light is after a buyer moves in only to find out their place is actually smaller than they were lead to believe. By this time it is too late and their only way to seek reimbursement is to hire a lawyer and pursue it legally which can be cost prohibitive for most especially after they have just purchased a new home, furniture etc. I am not sure if this is happening in the Manhattan market but listing Realtors in Calgary are getting around this lack of owning a tape measure by stating on the listing that ‚Äúbuyers are to verify sq/ft‚Äù. I mean come on now…..the average commission in Calgary is aprox $20,000 so we get paid very well for the work we do and are expected to be held at a certain level or standard to earn that commission. Why is it then we cheapen that standard by overstating or lying about the second most important factor in the pricing of real estate besides location….that being the sq/ft. If a Realtor can‚Äôt even buy a 100ft tape measure and take the extra ¬?hr to 1hr to accurately measure and graph out a property to make that $20 grand commission, they shouldn‚Äôt be in the business.
    I don‚Äôt believe this is the sole responsibility of the buyer either to verify this information…other words ‚Äúbuyer beware‚Äù. Realtors working with buyers need to make them aware of this problem, and do what they can for the client to verify the actually sq/ft of the property. If a Realtor knows a similar unit in a complex sold and was 100 sq/ft smaller than the one that is currently for sale TELL YOUR CLIENTS!!
    I ultimately think the responsibility rests on the listing Realtor shoulders to convey accurate and true information on the property they are marketing. If they construe false information to the public that is just false advertising….plain and simple. It is no different than if you went to a Toyota dealership and ordered an new SUV with a V8 engine and after taking delivery found out it only had a 4-cylinder engine.
    If practises like this continue in the market place there is going to have to be an implementation of a governing body or some sort or an independent approach to measuring real estate to get everything back on track. We can‚Äôt rely on appraisers and buyers to pick up on our mistakes or inaccuracies. I know from talking to Realtors across Canada and the US that this is a big problem everywhere, and not just in Calgary and Manhattan. I couldn‚Äôt agree more with Doug‚Äôs statement about Realtors hiring independent companies with a standard of measuring properties. Since this sort of measuring practice is probably going to take a while before the real estate industry to find a solution…I have another suggestion. How about all us Realtors out there go to the hardware store, pick up a tape measure, learn how to measure the sq/ft of a large box (House), and take 1 more hr out of our day to earn that big commission.
    It would be a great way to stop the growing house problem, and keep our reputation as professionals.
    Nevin Van Nest . Realtor . Royal LePage Foothills

  4. Thanks Nevin for the accolades and the incredibly insightful comments around square footage and your market. I agree that most simply use the square footage that was last stated for a property without doing a new and accurate measurement. There is a problemn though with a seller who thinks they bought a 2500sf home when in fact it is 2000sf. On a price per sf basis, they likely overpaid. I urge my buy side clients not weigh too heavily the sf comparison because it unfortunately isn’t comparing apples to apples. I think a transition to a standardized measure would be challenging but not impossible and agree that some entity would have to govern the process.
    Thanks again!

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