Is it true if an appraiser shorts your square footage and it is not 50 or more sq ft they do not make any changes?

Asked by Tanner, Fresno, CA Fri Aug 26, 2011

This appraiser shorted my sq footage and said if it is not more than 50 ft they do not make any adjustments. When he gave the value I divided that by the sq ft he gave to get the price per sq ft. He said you cannot take the shortage times the price per sq ft and add that as additional value. He said it does not work that way. Is that true?

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Shane Milne’s answer
Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Fri Aug 26, 2011
The appraiser is correct, it does not work that way, but if 50 feet is significant then it can affect the value. If you have a 1,850 sq ft home then 50 sq ft isn't going to make a difference... however if you are looking at studios in NYC at 400 sq ft, then yes another 50 sq ft will have an impact as that is a significant percentage of the living space.
1 vote
Eric J Soder…, , Pleasanton, CA
Fri Aug 26, 2011
Hi ……

I thought I would expand on Shane’s answer. The reason this does not work is that every area has a price ceiling. Meaning that no matter how big a house is, people will only be willing to pay so much to live in that area.

For example: If a 1000 sq ft home sells for $300 per sq ft, or $300,000. This does not mean that a 3,000 sq ft home will sell for $900,000. What you find is that larger homes will almost always sell for less per square foot than a smaller home all other things being equal.

Hopefully this clarifies your questions.

Best regards,

Eric Soderlund
1 vote
One_beachlvr, Home Buyer, Fresno, CA
Sat Apr 16, 2016
Appraisers are busting deals right and left here in Texas. The problem with the difference in square footage is that they don't usually go in and measure the other houses that they are using as comps so it is not "apples to apples"; they use the listed square footage on the comps and their measured square footage on the subject property so any adjustments they make are always going to be questionable but not changeable. Additionally, they go back too far in quickly appreciating markets rather than look at other similar neighborhoods for more recent sales and that often brings down appraisal values as well. Sadly, while market value in it's simplest form is "what the market will bear", appraisers have a lot more rules and are held to a more conservative standard because at the end of the day, their job is to protect lenders from ending up with over-leveraged houses when buyers default. They are not held to any accountability in the transaction as they have no skin in the game and they are considered the expert regardless of the numbers so sadly, it's very difficult to get around a bad appraisal. If you care enough to maintain a record of these low appraisals and then go back and see what the homes actually sold for, maybe a body of evidence large enough to make a change could be collected but I doubt anyone in this industry has the time to do that!
0 votes
Fresno Appra…, , Fresno County, CA
Mon Aug 29, 2011
One more thing -- if the appraiser did not make any adjustments for difference in square footage - to the comparable sales - then the error really did not effect the appraiser's final opinion of value. In your report take a look on page 3 - It would show up here -- on the square footage -- cost approach. Did the final cost approach value support the comparable sales approach to value?
0 votes
Fresno Appra…, , Fresno County, CA
Mon Aug 29, 2011
I am an appraiser and would like to address this issue. Question? How did you determine your square footage? Did you measure? County records? or subdivision records? I agree with the last answer -- 50 square footage on a small home is VERY important.
When you received your appraisal report (you can get a copy from your lender) you will see a floor plan with measurements. Did you find an error? Also in the report on the sales grid - did the appraiser make adjustments to the comparable properties for difference in square footage? Depending on the market reaction to square footage - I typically will only make an adjustment if there is a difference over 100 square footage
(smaller homes get adjusted for any difference)
If this were a home I appraised and you had an issue - I would want to know if I was wrong. and yes I would do something about it. I would measure your home again -- County records do make errors. If my research shows the county records shows one thing and I measured something different I ALWAYS make a comment in the report.("county records show subject has ***** square footage - my measurements show **** square footage. Home owner reports an added on bedroom of *** square feet - done on *** date . Permit number ***- all work was done in similar finish and quality as home)

If the subject measures larger -- guess what -- was there an add-on? was it done with permits? I call the planning department and pull all permits on the subject. This takes more time but in the long run -- that's my job-- I want to make sure I do a complete job - measure correctly-- and address any issues.
hope this helps
0 votes
Ron Thomas, Agent, Fresno, CA
Fri Aug 26, 2011
I have found that a lot of the homes built in the 70's and 80's have errors in the County Records:
I don't know if this is because of the systems they had in place, (not computers) or due to the humans doing the work.
When we write a LISTINg and submit it for MLS, we research the # of Bedrooms, House SQFT and LOT size among other things. We can enter things that are different than the Records and put down things like BUYER VERIFY, or PER SELLER.
Things like this, are not going to keep a house from selling.
0 votes
Lauryn Eadie, Agent, Reston, VA
Fri Aug 26, 2011

The appraiser has the final say. Even if you think he is wrong! Very rarely does an appraiser change his opinion, even when challenged, and it is very hard to go above them. The only way to get around a bad appraisal is to change lenders and start the process over and hope for a different outcome. But your purchaser would have to be agreeable to that, as it would cost them more money.
Depending on what the value came in at compared to what your sales price was or what you were hoping for, usually negotiating with the buyer is the best place to start.
0 votes
Clark Riel, Agent, Reno, NV
Fri Aug 26, 2011
I am interested in what the county has on record as being the square footage of your home and how does that compare to what the appraiser came up with. I think 50 square feet is pretty important, especially if it is the difference between a resale and a short sale. In this day and age the value place on an additional 50 square feet could make or break a deal. See what the county has on record and take your findings to the appraiser and if it is messing with your sale press the appraiser to make adjustments.
0 votes
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