Are we out of luck? Inaccurate listing square footage

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Are we out of luck? Inaccurate listing square footage

Ron Brady
Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes

We bought a MLS-listed distressed property sight unseen through our local real estate agent. We live in Mexico and bought in NJ and moved fast because we know the community and believe the home is a good BRRRR prospect. The listing square footage was 1,748. We've learned, well post purchase, that the actual livable square footage is 1,549, 11% less. Naturally, this difference meaningfully impacts our originally projected after repair value.

Anyone here experience this and successfully pursued legal recourse with the seller, listing agent or buying agent? Or are we simply out of luck because we bought it as-is and did no inspections?

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Jeff CopelandBusiness Member
Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
3y

How did you verify the actual square footage? It's not uncommon for public records to say one thing, an appraisal to say another, and a measurement to say a third. And there's also "gross" square footage versus "living area" square footage. 

Often, if the public records underreport the square footage, there's very little invective for a property owner to correct it (it would just raise their property taxes). But for an investor it often makes more sense to have everything updated and accurate before selling or refinancing a property. 

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  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Ron Brady:

    We bought a MLS-listed distressed property sight unseen through our local real estate agent. We live in Mexico and bought in NJ and moved fast because we know the community and believe the home is a good BRRRR prospect. The listing square footage was 1,748. We've learned, well post purchase, that the actual livable square footage is 1,549, 11% less. Naturally, this difference meaningfully impacts our originally projected after repair value.

    Anyone here experience this and successfully pursued legal recourse with the seller, listing agent or buying agent? Or are we simply out of luck because we bought it as-is and did no inspections?


     Nope you bought as is right? It probably said 1748 , its up to you to know the heated area so this is on you, did you ask ?   Also you did not walk through and its only 200 sq ft, But bigger question. You do not have a team there looking out for you? Not a good idea, 

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  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    3y

    @Ron Brady 

    Did you sign any type of homebuyer or home-seller condition disclosure? In some states, sellers sign a disclosure form or issue a credit to the buyer for failure to submit this disclosure.

    Not legal advice -> Chances are there is little recourse here. If this was purchased as-is, I'd refer to the contract to see if hopefully there is some flexible/vague wording that would give you a chance against the seller.

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  • Harris Miller
    Real Estate Agent · Nashville · Member since 2022 · 14 posts · 5 votes
    3y

    Hey Ron, really sorry to hear this. I work with investors in the Nashville area and have experienced as-is properties. It is very important when working with an as-is property to do a lot of research yourself as these kinds of issues can pop up. In the future make sure to have clear and good communication with your agent as he should see these kind of issues pop up.

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  • Ron Brady
    OP
    Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes
    3y

    @Bob S. Thanks for weighing in. Yes, bought as is. No, we didn't measure to verify the listed SF. Yes, we do have a local team, but they missed it. This said, the measurement didn't feel off when we walked through. Lesson learned.

    @Abel Curiel Thanks for weighing in. Disclosure said nothing as home was left to grandchild when grandparent living there passed. Reviewed contract and found no options. Lesson learned.

    @Harris Miller Thanks for weighing in. Makes sense. Lesson learned.

    All: Our silver lining is that we purchased for $260k, expect to reno at $125K and still expect to ARV at $475, so we're still ahead--just not as ahead as we'd originally expected. We appreciate the advice!

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  • Jeff CopelandBusiness Member
    Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
    3y

    How did you verify the actual square footage? It's not uncommon for public records to say one thing, an appraisal to say another, and a measurement to say a third. And there's also "gross" square footage versus "living area" square footage. 

    Often, if the public records underreport the square footage, there's very little invective for a property owner to correct it (it would just raise their property taxes). But for an investor it often makes more sense to have everything updated and accurate before selling or refinancing a property. 

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    Yeah, I think you're stuck. But.....is it that big a deal? Sounds like a great opportunity and a couple hundred Sf is not a big deal IMHO

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  • Ron Brady
    OP
    Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes
    3y

    @Jeff Copeland Thanks for weighing in. Our architect gave us his calculation of the liveable square footage, which is when we discovered the discrepancy.

    @Bruce Woodruff Thanks for weighing in and fair point on it not being that big of a deal, on balance. This said, at an ARV of ~$320/SF, we would have preferred to have had the added $63K valuation than not. But, you're right, it's still a good deal. And a lesson learned.

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  • Mike Dymski
    Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    3y

    Laser tape measure...easy and fun...prior to making an offer

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  • Jared HottleBusiness Member
    Real Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes
    3y

    Not sure what the buying or rental market is like in NJ but in my area the difference of 199 sq feet in most houses would make little difference. Number of bedrooms, bathrooms, garage stalls, updated property make way more of an impact on value and rentability. 

    I am unsure if you have recourse or not but if it were me I would just let it go and get down to managing the BRRRR. Make note of it, bring a tape measure or measuring tool to future showings if it bothers you or make a plan of action with your agent in the future.

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  • Ron Brady
    OP
    Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes
    3y

    @Mike Dymski Thank you. Great recommendation.

    @Jared Hottle Thank you. Appreciate the thinking.

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  • Billy Daniel
    Rental Property Investor · Russellville, AR · Member since 2014 · 688 posts · 509 votes
    3y

    There's probably nothing you can do at this point.  Real estate laws are largely state driven so NJ may have some options for you.  In my state, once you sign the papers you own it and it is 100% up to the buyer to verify all information.  

    Now, if the team you were using intentionally misled you thats a different story.....

    1Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    What does the CAD say the square footage is? How much will this impact your project? 

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  • Ron Brady
    OP
    Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes
    3y

    @Billy Daniel Thank you.  Our local on-the-ground team is good at many things, with weaknesses in some areas. They just missed this one. Lesson learned for us and we'll add a check-the-SF step to our future purchases.

    @Eliott Elias Our architect gave us the actual SF--not sure if he used CAD to calculate it. Home-wise, it will have zero impact. Valuation wise, at an ARV of ~$320/SF, we would have preferred to have had the added $63K valuation than not. Alas, nothing we can do now and lesson learned for the future.

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    @Ron Brady Thinking with the builder side of my brain, the other idea I have is this - since you ended up with less SF, can you make the SF you do have worth more, per SF? You know, custom kitchen and high-end finishes throughout? I know you can't much exceed the neighborhood average, but you can push it to the max anyway. Just my .02...

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  • Ron Brady
    OP
    Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes
    3y
    Thanks Bruce! My wife and I were thinking along those lines, but we're not sure how to get the best valuation bang for our renovation buck. We are thinking hardwood floors, crown molding and wainscoting on the first floor, luxury vinyl tile on the second floor and focusing on upgraded finishes in the kitchen and bathrooms are among the best ways to boost our per SF valuation. As a builder, are these right? Are there other areas where you'd recommend we focus our renovation dollars?
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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y
    Quote from @Ron Brady:
    Thanks Bruce! My wife and I were thinking along those lines, but we're not sure how to get the best valuation bang for our renovation buck. We are thinking hardwood floors, crown molding and wainscoting on the first floor, luxury vinyl tile on the second floor and focusing on upgraded finishes in the kitchen and bathrooms are among the best ways to boost our per SF valuation. As a builder, are these right? Are there other areas where you'd recommend we focus our renovation dollars?

    Ron, the biggest area in all my decades of doing this was always the kitchen, #1 every time. So - 1) nice cabinets (not custom made, but Lowes Diamond brand or similar). 2) Nice counters, quartz, not granite. 3) Step up a notch in brand recognition for the appliances, maybe LG or Bosch or whatever is considered 'cool' in your area? 4) Add some tricks, like extra pull-out cabinets for breadboards/spices and such? (Hint - ask your wife :-) 

    Use engineered wood floors instead of LVP, a huge upgrade in looks and $$ for an extra $1 SF or so. Especially in the LR, DR, Kitchen, Great Room.

    Next, focus on the Master Bath....if possible it should be an Ensuite of course. Throw in a flush entry shower, maybe a stand-alone tub, nice cabinets, and a tower between vanities with charging stations etc.

    You can achieve these 'high-end' types of finishes without spending the big bucks, you just need to know the tricks...

    Shoot me a PM if you want more ideas or pictures...

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  • Ron Brady
    OP
    Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes
    3y

    @Bruce Woodruff Thank you for these recommendations. They are very helpful. PM forthcoming!

    1Reply
  • Lan Toma
    Member since 2023 · 2 posts · 0 votes
    3y

    I was searching for inaccurate square footage and found this post. It seems you are all very knowledgeable so hopefully you can provide some insights.   My daughter went to an open house and liked it but she did not have an agent yet 2 weeks ago. The listing agent's partner who was there showing the house said he could be her agent. So my daughter said yes. They listed the property at 3200sf in size. So we thought it was a good deal by the $/per square foot as she is in another state from our. After we paid for all home inspections, sewer inspections and wiring fee for the $50k earnest money,  now we found out REMAX only listed the house at 2530sf. So we asked the broker yesterday. He forwarded the email from the listing broker that shows the county's record, but the county's record says clearly the building sf is 2530sf with 1630sf above ground and in the basement only 900sf is finished, 670sf is not finished. The broker insisted at that time before county's recording, only 900sf was finished area and other 670sf was unfinished, but now it's all finished. So we asked the inspector. He confirmed only 900sf in the basement is finished as he told my daughter when they were doing the inspection, just like the county's record shows. Since the main reason we decided to buy the house was based on the square footage of 3200sf instead of 2530sf and went ahead spending all that money for inspections etc.. And my daughter's broker never verified his partner's listing either while she is just a young girl who are just a few years out of college. We feel it is reasonable for us to ask for reimbursement of all those fees. Because if we had know the property's building footage (livable space) is only 2530, we would never have put in the offer at that price as advised by this listing broker's partner from the open house. But this broker flatly declined. So right now, they got our inspection reports to show others and still says it's 3200sf on the listing, while we are losing all those fees amount to $1000 paid solely because of the inflated square footage. What can we do? Thank you so much everybody in advance as we are feeling quite helpless...

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