Home Buying in Houston>Question Details

aymanm70, Home Buyer in Aurora, CO

Can I object and revise the sales price after having an excuted contract due to difference in living area (listed and appaised)?

Asked by aymanm70, Aurora, CO Tue Jul 30, 2013

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Barbara Coker’s answer
Well, if it hasn't been appraised yet, according to your comment from yesterday morning, by what source are you saying the square footage is different? You said the realtor said "if it appraises right, we should go forward."
Barbara Coker
NMLS#228545
Licensed Mortgage Loan Officer
100% Home Loans All Over Texas!
0 votes Thank Flag Link Wed Jul 31, 2013
Square footage is one of those figures that can vary between different measurers. Most MLS systems just refer to the county measurement because of that fact. Did it appraise for the sales price? If it did, and you obviously liked what you saw in the house, then what difference does it make? If it came out shorter on the footage than you had been told, then it's worth more per square foot than you had thought.

Barbara Coker
NMLS#228545
Licensed Mortgage Loan Officer
100% Home Loans All Over Texas
2 votes Thank Flag Link Tue Jul 30, 2013
While this is not addressed specifically in our contracts here in Texas it is something that you can at least have a conversation about. How do you in fact know which one is correct to begin with? In the end homes are not really sold on size alone. Maybe in cookie cutter subdivisions but homes are priced on their location and amenities so unless it was a huge difference you could show that would potentially effect the value then I do not know if you would have a case but but again with limited details it's really not possible to make a conclusion. I would have a discuss with your agent or broker to see what options you may or may not have.

Hope this helps.

_____________________________________________________
Don Groff | REALTOR® & Mortgage Broker
Austin Real Estate Pros & 360 Lending Group
o 512.669.5599 | m 512.633.4157 | listings@dongroff.com
websites: http://www.AustinListed.com | http://www.360LendingGroup.com
Web Reference: http://www.AustinListed.com
1 vote Thank Flag Link Tue Jul 30, 2013
What kind of difference are we talking about? 25 sq.ft., 100 sq. ft., more? Barbara's message contains excellent advice. If the property appraised, you love the place, and you're looking at a few hundred dollars, forget it and enjoy your new home. Congratulations!
Web Reference: http://www.har.com/algeffon
1 vote Thank Flag Link Tue Jul 30, 2013
Size can differ between appraisers, tax authority, and builder plans.

While many people try to use size as a basis for their purchase, it should only be used as a guideline. Every house is different. Different locations, different features, different finishes, different appliances, etc. Only using price per sqft as an indicator of value is not the only measure.

With the TREC standard residential contact, if you are in the option period you can adjust price for any or no reason. Seller does not have to agree, but you can always negotiate. If you are outside of the option period you should ask your realtor for advice. There could be other options for example if the home did not meet the value of the contract.

The typical residential contract does not address this specifically. Some contracts do.

Would you want to pay more, or feel good if the appraisal came out bigger and the seller wanted more money? If not, I would think you would want a win-win deal and therefore not go back to the seller wanting to adjust sales price as they will likely feel the same way.

Every situation is different and you haven't given us the discrepancy...so we don't know if it is 3ft....or 300sqft, and we don't know where the original and discrepant numbers came from.
1 vote Thank Flag Link Tue Jul 30, 2013
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
If it is still in the "option period," you can renegotiate the sale price or rescind the sale contract and won't lose the deposit.

If after the "option period," you still can back out but may lose EMD.

The appraiser work for the lender. If the lender rejects and won't approve your loan or if the lender requires repair that is 5% higher than sale price, no one, seller and or buyer have to agree to it and both can withdraw and deposit will be turned to you.

I hope you have an agent to help you there. It's always good to have a real estate agent to represent you when you buy (or sell).

My opinion, worst case, I would rather lose the deposit than take in hundred of thousand of dollars for something I am not happy about.

Further thoughts, in this particular case, it depends on how big of the difference between the listing and the appraise -- in the living area. How significant is it? Remember, it can be an honest mistake. Bottom line, if all else is great, you like the house, and lender does not raise the red flag, then go for it. It comes down to personal preferences.

Best!
gabrielle
http://www.har.com/gabriellenguyen
1 vote Thank Flag Link Tue Jul 30, 2013
Bottom line, no. Don't believe me, check with an attorney. There's nothing in the contract that stipulates square footage and honestly it doesn't even matter. You saw the home, it's as large now as when you saw it, has as many rooms and features and just because there's a discrepancy between the listed square footage and what one appraiser listed means absolutely nothing. Bring out another appraiser or measure it yourself (from the exterior) and you may have a third number. Buyers put to much emphasis on square footage and it's not deserved. What really matters is the floor plan, the number of rooms, the finish quality, the location etc.
0 votes Thank Flag Link Wed Jul 31, 2013
All good answers.

Note that the most appraisal districts (at least that I'm aware of) measure from the outside of the home and round to the nearest foot. If my math is correct, the home is about 3,850 sqft but was quoted about 3,927 sqft. Also note, the MLS discloses that the sqft is not guaranteed.

All pending sales in that price and square foot range have been on the market for a short time. Some sizes are per the CAD, some by builders, and some by appraisers. I would say there is a small possibility that the current appraisal is quoting the wrong sqft. If its a big concern, I would get a copy of the last appraisal and verify measurements and calculations to see for yourself.

You are free to haggle (assuming your are still in the option period) but just keep in mind that you risk loosing that home and you might be on the road looking again; new inspections, negotiations, etc
0 votes Thank Flag Link Tue Jul 30, 2013
The realtor wants to get the deal through for sure so she is saying "as long as it appraised right, we should go ahead with the deal"
0 votes Thank Flag Link Tue Jul 30, 2013
As Annette Lawrence has implied, it depends on the condition of your market and the situation with this particular property. I have a house listed for sale that has received 8 very strong offers. I am confident that any one of these buyers would be delighted to have this house even if they found out that the house was 77 sq. ft. smaller than they believed it to be.

If you were #1 in a multiple offer situation, be glad and move on. The small difference is negligible, in my opinion.

On the other hand, if the property languished on the market and yours was the only offer after a reasonable marketing time and you have already negotiated a price that you find attractive, go for it. You may not be successful but you may find that the seller is willing to reduce the price for you rather than put the property back on the market and try to find a new buyer.

By the way…what does your Realtor advise?
0 votes Thank Flag Link Tue Jul 30, 2013
Of course you can!
And here are the possible consequences:
1. Seller accepts revised price
2. Seller rejects modification.
3. Seller gives you ten seconds to accept original offer
4. Seller goes to back-up buyer #1.
5. Back-up buyer #1 dances in the street.

Your results may vary.

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us.
0 votes Thank Flag Link Tue Jul 30, 2013
Thank you all for taking the time to answer...Well, it is 77 square feet....It equates to about 9K assuming the price/sq ft is 120 or in other words it brings the price per square fott to be $123 instead of 120.5
I will give it a try
0 votes Thank Flag Link Tue Jul 30, 2013
If the seller misrepresented the sq ft of the home you may have a case. Your realtor would be your first source of direction and then possibly a real estate attorney. Many homes may have had additions or conversions of garage, attic, basement or other space that was previously not recorded by the appraisal district in the original construction as living space and may be the reason for the discrepancy. If permits were not pulled when the addition or conversion was done the appraisal district would have no knowledge of the increased living space and you may have issues there as well. If you are in option period you can always raise the issue and ask for a price adjustment; possibly listed price per sq ft multiplied by the appraised sq ft. It may spur production of proof of where the additional sq ft came from. I am surprised this would not have been explained up front in the seller's disclosures or listing. Good luck to you, I hope everything works out.

Margie Johnson
BHGRE Gary Greene
281-798-4100
0 votes Thank Flag Link Tue Jul 30, 2013
As said below, In TX, the option period is the key. Most Appraisals that I have encountered conduct the appraisal after the OP ends, i.e. after any repair negotiations that could affect the sales price have been completed.
If the lender's underwriting department accepts the appraisal, you are good. If not, and you really want the home, your agent can fight it with comps. stats in the neighborhood and local area, etc. There are all all sorts of things a buyer can do including a personal letter to the lender about the home and how difficult it was to find one in this market.
This is just another reason why you need an agent to advise and work for you!
Best of luck!
Barb Kelley, Realtor, SRES, CHMS
Realtor, RE/MAX Realty center
0 votes Thank Flag Link Tue Jul 30, 2013
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