In today’s real estate market, there are a lot of home buyers out looking for deals.  And, buyers sometimes use the price per square foot as an indicator of market value.  When they find a home that has a lower price per square foot than most of the other homes in a market, they figure they’re looking at a good deal.

Some markets don’t publish the square foot of homes for sale.  But, in other markets, agents use price per square foot to sell homes.

So, where do those size calculations come from?  From now on, you might decide that the square foot measurements on your listings had better come from your own tape measure.

Why the Tape Measure?

Put yourself in the position of an agent from Texas.  The agent listed a house, and used the square foot figure listed in tax records filed with a local government office.

What this agent didn’t know was that the people who bought the house were looking for a deal.  The buyers say that they wouldn’t have bought the house if it weren’t priced under market value, based on the price per square foot.

You know what’s coming next, right?

The buyers determined that the size of the house was overstated by 253 square feet.  So, what happens to their “great deal”?  It goes out the window.  And, what do the buyers do?  They sue the listing agent and the agent’s broker.

The listing agent had noted on the MLS listing the “approximate heated area” in square feet.  The agent had relied on tax information.  The buyers had signed a waiver indicating that they had not relied solely on any information provided to them by the agents involved.  Didn’t help any.

After the initial trial, a Texas appeals court upheld the lower court’s outcome, which awarded damages to the buyers, and held the real estate folks involved liable for misrepresentation and fraud.  Whew!

If you want to read the appeal court’s decision, you may find it interesting.

The moral of the story, of course, is this:  if you sell based on square feet, you better get out your tape measure!