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Handle Square Footage Issues

April 8, 2021

Note: This article was edited several hours after publication to correct inaccurate statements that originally appeared in the article. The inaccuracies were the result of editing errors. REALTOR® Magazine thanks those appraisers who reached out to us, and we regret the errors.

Square footage is important in home sales and a key number for helping to set a home’s price. But what happens when the square footage listed doesn’t match up to the appraisal? It’s not uncommon, and it can lead to questions and possible re-negotiations.

Square footage is calculated when you measure how much floor space is in a home. The total reported depends on what space is being measured: official “living space” versus the total space of the house. A question to assess is whether the garage, attic, or unfinished basement is being counted. Requirements from lenders generally stipulate that appraisers include only "gross living area"  in their valuation calculations. That generally includes only areas of a home that  are heated or cooled, realtor.com® explains.

Differences in recorded square footage may also occur when home additions are made without permits.

“This usually happens when someone decides to enclose a patio, finish a garage, or even add on to the existing structure to increase the amount of interior living area without first obtaining the proper permits,” RJ Winberg, a real estate agent in Orange County, Calif., told realtor.com®. Without permits, the local municipality won’t know extra square footage was added.

Each time appraisers visit a house, they will take new measurements of the property to ensure there is no square footage discrepancy. If the numbers don’t align, sellers may field questions about it and could even find themselves back at the negotiating table with buyers—usually if square footage is lower than what was presented. Or, if the square footage turns out to be higher than what was listed on the MLS, sellers might be left feeling they could have gotten a better price for their for their home.

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