Why Some Seller’s Fail To Correctly Disclose The Size Of Their Home

In real estate, the size of a home matters!  When representing Los Altos home buyers, verifying a property’s size (in square footage) can be troublesome.  Usually, the size of the home and lot (in square feet) is auto-populated from city/county records into the multiple listing service (MLS) information.  Most of this information is correct but sometimes it isn’t.  Why?

Some records of older homes (homes built prior to around 1940) have been lost or destroyed.  In addition, when many of the city/county records systems were transferred to computerized record systems, the data was entered incorrectly (entered manually).  Lastly, many homeowners have completed some non-permitted additions to their properties that wouldn’t be included in the official records because the addition isn’t legally there.

Example Of Building and Planning Record Errors

Several years ago, I represented a homeowner of a property that was adjacent to Stevens Creek near Fremont Avenue in Los Altos.  The county records indicated an 18K square foot lot.  This property was on a large lot, but it looked nowhere near 18k square feet.  After intensive research, we found out that there was an interior lot owned by the water district that had been incorporated into the county records description of this property.  Fortunately, we waited until we had the correct information prior to marketing the home.

Example Of Seller Recollection Errors

I can’t tell you how many times I’ve been out on a listing appointment and the homeowner’s recollection of the property’s size and the information from the county records differ.  Most of the time, the seller is innocently hoping the home is bigger (so they will get more when it sells).  But once they see a property description from a reliable source, they realize it isn’t.  No harm, no foul.  However, there are instances where the seller might not be so innocent.

Last month I was on a listing appointment with a homeowner of a Los Altos property that had an unusual floorplan.  It looked as if a garage had been converted into a living/bedroom with bath.   I showed the homeowner records that indicated that the home was 3 bedroom, 2 bath home.  However, the seller believed it to be a 4 bedroom, 2.5 bath home with approximately 450 more square feet than my records indicated.  (note: I am using fictitious numbers because the home is currently on the market).

How To Determine Market Value For an Addition that May Not Exist

When we got to the point of determining the home’s market value, I told them that I would recommend that it be priced at $1,500,000 until I could verify that the home was in fact larger as they had claimed.  They wanted it priced at $1,750,000, a $250,000 premium for something that may not legally exist.  Its odd footprint also reduced its market value.

The home was listed by another agent at the higher price.  I hope the agent did his due diligence and verified that the home was in fact a 4 bedroom 2.5 bath home with the additional 450 square feet.  Otherwise, the agent and seller may find themselves in legal trouble as soon as the new buyer recognizes the discrepancy. 

Recommendations For Sellers

1. Price the home according to its verifiable size.
2. If there is a discrepancy, hire a licensed appraiser to measure the home and provide the appraiser’s  information to any prospective buyers.
3. Disclose any alterations done to the property (whether you did them or not).
4. Direct any buyers to the appropriate building/planning office so they can do their own due diligence. 
5. Clarify everything about the property before putting the home on the market for sale. 

Remember, buyers will buy almost anything as long as the problems are disclosed up front.  However, buyers get squeamish when they are hit with a surprises.