The MLS stated the source came from tax record, but the county tax record showing different number.
The problem is the appraisal value is a bit higher than the purchase price. So I can't use my appraisal contingency to back out from the contract.
I'm now trying to pursue renegotiation route with the seller. My broker said I might loose the earnest money if I back out.
On the upside, I've found that asking a realtor for their opinion on this practice is a great way to find yourself a good realtor who will work with your best interests in mind.
Having had a few months to reflect on this I would have to say errors in square footage is more than excusable puffery and as I said before it could be actionable, but it's a pain to persue legally and the "reward"can be minimal. (please review the caveats in my previous post)
For those buyers for whom exact square footage is important, I would suggest you invest in a $30 laser measuring tool.
Here's a little bit of common sense and math put together. If the sq. ft. value is more than 10% of a difference between what you can measure inside the house vs. outside the house, then you want to be wary. If it's more than 20%, then someone is either incompetent or dishonest (especially with a new construction). Unless it's a secured building for the DoD, etc. you're not going to have that kind of discrepancy.
As far as the comment regarding perception of square footage goes, you're right. However, realtors fall under this as well, more so than most in my travels so far (particularly on the seller's end). I've found my latest house hunting expeditions to be an interesting application of my Engineering and Architecture background when listening to them explain how a 3200 sq.ft. house magically turns into 1800 sq. ft. of living area.
In a buyer's market, I've toured less than 10 houses and I'm now to the point where if the realtor hasn't previewed the house, I'm not even interesting in looking at the MLS. There's enough to deal with these days without having to deal with blatant misrepresentation.
Head versus heart aside, as the selling agent's entire pitch was based upon cost or, value per square foot, that put square footage at the heart of the value computation .. and, on HIS selling basis .. if SqFt changes, so does value .. Whether I like the house or not is subjective .. long term profitability .. more a matter of numbers .. Make any sense to you?
You liked the house well enough--after walking through it--to make the offer you did.
I am sure you can recind your offer, but are you actually unhappy with the home, or do you feel you are being overcharged.
Many people have no concept of square footage. But when they like a house they buy it.
If the home right for you and your family--and is worth the money you offered--what's the issue?
The reason I asked about "material" is to see if this was a specific term of action available in your jurisdiction. If so I am unfamiliar with it.
"Material" in contract law is one that is substantial and important. As you can appreciate, these are subjective terms and the outcome of a claim would depend on all of the facts and circumstances attendant to the transaction.
The common actions in contract law are "neglegent misrepresentation" and "fraudulent misrepresentation."
To prevail on either one there are certain elements that must exist or be proven.
Negligent has fewer elements to prove and they are less stringent (easier to meet.)
The big difference between the two is in the remedy available. Basically, Fraud=$.
The big problem is that in many jurisdictions "caveat emptor is applicable to real estate transactions relative to conditions open to observation. Accordingly, in cases where a condition is discoverable and the purchaser has an unhampered opportunity to investigate but fails to do so, he has no cause of action for misrepresentations or misstatements by a vendor, unless the vendor's actions or omissions amount to fraud," and fraud is hard to proove.
As you have not closed, but are under contract, I suggest you stop and take inventory of your situation. Talk to an attorney as you may have a good case to break the contract and walk away. But is that what you want? An attorney could advise you as to whether you have a stonger case that would alow you to do some arm twisting and get a better deal, or if all you have is the right to break the contract and either renogotiate or walk, or that you are stuck. As I said this is a subjective area and an attorney is unlikely to be able to give you no more than what your chances are at prevailing (no guarantees) and what legal costs are likely to be incurred to pursue your chosen remedy. The hard choice will be yours.
As to why I use the phrase "Material Misrepresentation" .. I blame the dictionary.
material misrepresentation - Definition
Deliberate hiding or falsification of a material fact which, if known to the other party, could have aborted, or significantly altered the basis of, a contract, deal, or transaction.
Hiding the fact that a property is fewer square feet than you are pitching, constitutes hiding or falsification of a material fact if value per square foot is he basis of your valuation argument.. Well, that or BLATANT incompetence...
As to Gene's question - Some post offer due diligence revealed that this home was based on the http://www.frankbetz.com Dalrymple plan which maxes out at 2747SqFt, including the finished Bonus room. There is no finished basement space, nor, any attic space. Granted, there have been a few liberties taken with the basic plan, but the footprint has as far as I can tell, not been altered. That makes it rather difficult to squeeze 3500 SqFt into an under 2800 SqFt shell.
I am endeavoring to arrange for an impartial third party remeasure, to see what the numbers might actually be, then, make decisions going forward from there.
My initial question though, was based upon the assumption of verified material misrepresentation, not backed up by an error on the tax card. ( sloppy I can sort of forgive, crooked .. not so much )
This is a new build, no un-permitted remods involved.
Surprisingly, my buyer's agent did not pull the tax card early in the curve, and it should be showing up soon so that we may determine if the town's measurements might be in error, or, the seller's agent's.
Scott suggested a price adjustment based upon discovered actual SQFT ..
In this case: ( ACTUAL SqFt to be determined )
Seller / Seller's Agent says 3500 SqFt. 3500sqft @ $390k = $111.43 / SqFt .. The plans say 2747 SqFt, so, at $111.43 / SqFt That's $306,098.21 .. Hmm .. a bit of a spread ..
Were you folks the buyer .. where would YOU go with this situation .. Were you the buyer's agent? .. The seller or the seller's agent??
The more input I get on this the better .. Thank you all in advance for any input you might be willing to provide.
town tax assesor
All measure the SF-GLA of a home, you will likely get 7 different answers and totals. Especially if it has SF added after the house was built, or up in an attic area, etc. The home builder (and most sellers) will use the SF based on the exterior of the walls to the exterior of the walls, even though officially that will be a little high as one cannot live within the wall space; that would not be "living area".
Thanks, and Good luck,
Are you the buyer agent in this circumstance? If so, although the seller's agent misrepresented the square footage on the mls listing and is responsible for this, you as the buyer agent should have confirmed that the information was correct. Are your buyers overly concerned with this? Did they purchase the home due to the amount of square feet listed or because they love the house and it is spacious enough for their needs? Are there finished rooms that may not be showing on the tax card because the sellers did not pull permits to finish them? Sometimes actual square footage and what the tax assessors are taxing the home as, doesn't match. I would confront the list agent to see where the amount listed in the mls came from to see if there is a reasonable answer before looking for recourse. Good luck!
Before taking action or deciding to do anything be certain YOUR information is accurate. Since most agents take the homes square footage directly from the tax records, this could be a possible source of the problem.
Additionally, MLS information always comes with the clause attached, "Information deemed reliable but not guaranteed. Parties are advised to verify."
It may also be beneficial to have your agent explain how the square footage is calculated for: square footage under air, square footage, square footage, gross square footage, heated square footage.
Be sure you have all the information and that what you have is correct, before doing anything.
The Eckler Team