As an appraiser, I look at numerous MLS listing sheets on a daily basis. Appraisers rely on the accuracy of these listing sheets in order to help estimate the value of the home they are appraising. At least in the Indianapolis area, many times realtors will use the assessor records to determine a home’s square footage when they list a property. Unfortunately, relying solely on the assessor records can have negative consequences for buyers, sellers and listing agents.
For example, I recently completed an appraisal on a home that was approximately 25% smaller than what was listed on its MLS sheet. The listing agent based the home’s value and list price according to the square footage stated on the assessor records. The assessor records show the home having two full levels when in reality it only had one level with a partially finished second level. Needless to say, the home’s value did not appraise for its purchase price and the buyer and seller were not happy. Consequently, the listing agent and broker gave up some of their commission in order to make the deal work.
Granted, this situation is not the norm and most of the time assessor records are fairly close to a home’s actual size but it is always a good idea to measure a home before listing it for sale. The scenario above could have even gone the other way and have been much larger than what the assessor records stated. This could have resulted in the home being listed and sold for much less than it should have. Even home owners who are not selling their home should make sure their home’s size is accurate when compared with the assessor records to ensure they are being taxed appropriately.
While there is no standard way to measure a home, appraisers will typically measure the exterior parameter of a home and subtract out areas that are not finished or not heated. I have definitely over simplified it to keep this post to a reasonable length. You should keep in mind that there are numerous types of software programs out there that will calculate a home’s square footage based on your measurements. If you don’t know how to measure a home, you can check out the American National Standards Institute website. This is a great resource and will tell you what areas of a home are typically counted in a home’s square footage. If you don’t want to mess with measuring a home, I know many appraisal companies, including my own; will offer a measuring service for a fraction of the cost of an appraisal. Check around with your local appraisal offices for prices.