Square Footage Disputes?
Square Footage Disputes?
Investing Strategies updated 9 months ago

Square Footage Disputes?

A quick look as to why Square Footage Disputes Arise

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One of the most important elements, when you are selling or buying a property, is to make sure that the measurement of the house is accurate. Simple questions like the size of the flooring, bedroom, and bath are not only vital but also dictate the price of the property. Disputes rarely arise on these features of the house but if done wrong it can cause a huge blow to the whole deal.

 

Size matters to everyone in the transaction—buyers, sellers, agents, appraisers, and lenders—this is something that you should never go wrong. 

Things to Watch out

According to Realtor.com Appraisers use three approaches to develop an opinion of the value of a home:

 

  • The sales comparison approach looks at the subject property against similar, nearby recently sold properties.

  • The cost approach considers the value of the site and the estimated cost to replace the subject dwelling, less depreciation.

  • The income approach generally applied to multiunit dwellings, is applied where rental income is a factor in the decision-making process of buyers and sellers.

How About Agencies?

It is also noteworthy that the agencies involved in residential lending have their criteria too According to Realtor.com they agree on these three factors:

  • The gross living area is the finished, above-grade residential area.

  • Gross living area does not include unfinished spaces (e.g., exposed floor joists, wall studs, and roof rafters) or unlivable areas (e.g., stairwells, stair landings), either above or below grade. Therefore, any area, either partially or fully below grade—like a walk-out basement—is not recognized as a gross living area.

  • Areas like garages, porches, patios, and finished areas not accessible from the interior of the primary dwelling, including accessory dwelling units, are also excluded from the gross living area.

In Conclusion

Space is everything. Be sure that its size is clear when you talk to buyers and sellers. Recognize that the gross living area calculation used by an appraiser may not match public records, but it enables appraisers to develop a credible comparison in the sales comparison approach and a credible cost approach that will lead to a supported opinion of the market value of the subject property.

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