This week the NC Real Estate Commission warned listing brokers (again) to stop using the square footing in the tax records in their listings. It remains a sad commentary on the profession for so many listing brokers to continue advertising this material fact in violation of Commission guidelines. Especially with this information being a focus of last year’s required General Update and Broker-in-Charge Update courses and with the directions provided in the Commission’s publication, “Residential Square Footage Guidelines”.
Steven L. Fussell, Senior Consumer Protection Officer, in the Commission’s Real Estate Bulletin for May 2018 writes an article entitled “Square Footage Errors.” The article addresses multiple problems that can be caused by a listing agent who copied the square footage from tax records into MLS. Mr. Fussell provides the facts of a recent Commission complaint where the MLS contained the incorrect square footage.
In the article, Mr. Fussell writes that “The subject transaction closed at a sales price that was adversely affected by the incorrect square footage figures entered into the MLS by the listing broker for the two other properties.” He also points out that there are possible legal consequences due to violating the Real Estate License Law for “misrepresentation of a material fact, false advertising, being unworthy or incompetent to act in a manner which protects the public, and engaging in dishonest dealing, respectively.”
The broker-in-charge of the firm in the complaint “also bore responsibility for ensuring that the advertising for the property is accurate.”
“Square footage misrepresentations have the potential to affect more people than just the buyer of the property being misrepresented,” says Mr. Fussell. He continues to summarize the damage of incorrect square footage by pointing out that these mistakes can affect buyers, sellers, brokers, appraisers, and lenders. Brokers and appraisers who have used sale prices of the flawed comps when preparing a CMA, BPO, or appraisal may have encountered incorrect market values or expected selling prices for the properties being evaluated, due to the misstated square footage for the comps.
Mr. Fussell ends his excellent article with a warning to brokers: “Any broker who includes a square footage figure in the MLS or any other form of advertising should exercise great care to accurately determine and report the square footage. A broker should never rely on tax records, MLS data for previous listings/sales, previous appraisals, blueprints, or the seller’s word for square footage.” (Emphasis added.)
If you’d like to learn more about square footage, BrightPath Education Services has been approved by the North Carolina Real Estate Commission to offer the class “Square Footage Secrets” as a 4-hr real estate elective continuing education course. If you’re interested in one of our instructors teaching this course to your group, give us a call at 800-268-6180 or send us an email at [email protected]
In need of a live real estate or appraisal CE class? Check out our schedule to see our upcoming classes. Looking for an online alternative? We have many online appraisal and real estate classes to choose from.