When searching for a home there are so many different criteria that buyers must consider as they finalize their purchase decision: location, school districts, the number of bedrooms and bathrooms, the condition of the house, property taxes, surveys and, of course, the overall size of the house, to name a few. But how big is a house anyway? The answer, as so often occurs in real estate, depends; it specifically depends on who is measuring the house and what they are measuring.
In a recent transaction we represented a client who acquired a bank owned home (foreclosure) that was listed in the Multiple Listing Service (MLS) as being 4,400 square feet. Interestingly, the actual size of the house is closer to 5,100 square feet and so begs the question “how big is it anyways?”
Inside the real estate industry many different types of people measure houses including real estate agents, appraisers, architects, the local tax office, contractors and others. Per the North Carolina Real Estate Commission Residential Square Footage Guidelines: “Although real estate agents are not required by the Real Estate License Law or by Real Estate Commission rules to report the square footage of properties offered for sale (or rent), when they do report square footage it is essential that the information they give prospective buyers be accurate. At a minimum, information concerning square footage should include the amount of living area in the dwelling.” The same publication defines living area as “space that is intended for occupation by people and that is:
- Heated by a conventional heating system or systems;
- Finished with walls, floors and ceilings of materials generally accepted for interior construction with a ceiling height of a leas seven feet;
- Directly accessible from other living area (through a door or heated hallway or stairway.”
Our client’s house (5,100 square feet) was listed as 4,400 because the third floor was “unpermitted,” and thus could not be counted in the total square footage. Unpermitted space is functional and may be lived in, however it has not passed local building code inspections. In this instance the third floor was converted from attic space to living space and no inspections were completed during that process. Fortunately this was a benefit to our buyer since we were aware of the issue before writing the offer. Additionally the third floor wasn’t included in the overall size listed in the MLS. Unpermitted space can be a major liability, though, if a buyer and their agent are not aware of its existence. It can be extremely expensive to retroactively permit space in a home.
If you, or anyone you know, is in need of professional real estate advice, please give us a call or an email.