In real estate, a world fraught with feelings of uncertainty, heightened emotions, and large amounts of money, we rely on certain measures to compare properties and establish value. We count the number of bedrooms, google the distance of a property to the T, and rely on representations of square footage. But what happens when these facts come into question? What if the square footage represented in MLS doesn’t mesh with our experience (or measurements) of the space? What if the square footage listed in MLS, public record, or the Master Deed isn’t consistent?
A buyer of mine and I recently looked at a condo in Cambridge where the square footage represented by the listing agent in MLS “just didn’t feel right” with our experience of the space – and it was a small space to begin with, <500 SF. We brought a measuring tape to the property and roughly calculated our own number, understanding that our measurements would not be as accurate as an architect’s. I then double-checked the listing agent’s representation in MLS (it was the same number as the City of Cambridge’s public record) and I compared that with the number recorded in the Master Deed. (It took some doing to find a copy of the Master Deed that had the recorded square footage, but that’s another story.) Long story short, the difference between the number in public record and the number in the Master Deed was significant enough – the public record said the property was roughly 150 SF larger than the Master Deed – that my buyer and I seriously questioned the value of the space. We never got a fully satisfying answer as to how large (or small) that particular unit was (though we did make an offer based our our understanding of the smaller space that was not accepted – and the property is still on the market). I am certain, however, that when evaluating square footage, understanding the context is critical:
Square Footage as Listed in MLS: The square footage number listed in MLS is usually the first square footage representation a buyer sees when looking at a new property. All third-party websites pull their data from the MLS (and buyers usually see listings online before seeing them in person). Buyers need to know that it is the listing agent who inputs the square footage – and all other listing information – into MLS. The MLS form has a blank box where the agent is required to add a number and check boxes to indicate where the square footage number comes from: “Appraiser, Measured, Owner, Public Record, Other.” There’s also a comments section for “Living Area Disclosures” where an agent has the option, but is not required, to add any clarifying language (e.g. public record and Master Deed SF are not consistent) and an optional check box if the agent chooses to indicate that the living area “Includes Finished Basement.” MLS is as reliable as the agent putting in the information.
Square Footage in the Public Record: The number represented on a city assessor’s website can come from a number of different places and there’s no check box indicating where the information came from. Sometimes, particularly for condominiums, the number in the public record is taken directly from the recoded Master Deed. (This is the best case scenario – see below.) For a single- or multi-family home, I’ve heard that the number the city lists was calculated, at some point, by a rough measurement of the exterior of the home and may or may not include things like enclosed porches and finished attics or basements. “Living area” in these cases can be unreliable. In the case above with my buyer, I’m still unclear where the city record number came from.
Square Footage in the Master Deed: For condominiums, the recorded Master Deed (found on the Registry of Deeds website MassLandRecords.com) will have square footage amounts for each condo based on an architect’s floor plan of the property (also found on the Registry website). These measurement tend to be reliable because an architect had to actually measure the space, though anytime there’s space in the eaves or finished lower-level space it’s worth checking the Master Deed to see what’s included. Architects have told me, for example, that there’s no standardized agreement on where to measure from if you’re measuring living area in a space that’s partly in the eaves of the roofline. Some people say that the standard is to measure from at least 5’ in height but this isn’t a hard-and-fast rule. Finished lower-level (or basement) space may or may not be included in the Master Deed and is sometimes called living area and other times usable space or storage (different towns view this differently and it gets into zoning issues).
Square Footage in a Marketing Plan: Many listing agents hire marketing companies to draw floor plans for a property to post on MLS. These floor plans can be very useful to buyers and are a helpful marketing tools. Some floor plan companies will calculate the total square footage of a property but will make the disclaimer that these plans are not an architect’s drawings and should not be treated as such. For some properties, however, these plans can be far more accurate than, say, the public record.
Square footage will – and should – always be an important factor to consider when comparing properties and determining value. But if the 2013 market has taught us anything, it’s that value is highly subjective (places selling for 10% over asking at prices that “must be worth it to someone” but not everyone else in the market). Basing assumptions of value on square footage, without examining the context of these numbers, is an illusion of certainty. The best way to address the stress and uncertainty of our market is with education. Informed buyers then can make the best determination of value for themselves.