The fact is, size affects everything.
Whether you're fitting a new couch in your new living room, upgrading kitchen appliances, or trying to determine if the HVAC will cool the proper amount of space. Size also affects the impact on value, which is why even the smallest measurement errors can be the most expensive lesson. Square footage disputes have made it to court then the news, and unfortunately some real estate professionals have been made an example of what not to do. It is absolutely VITAL that Brokers engage reasonable care in obtaining — in this example — the proper square footage.
The question then becomes, Whose Numbers CAN You Trust?
Supplying accurate square footage to Clients can be difficult if you don't have a reliable source. Many of us rely on the square footage based on the tax assessor's records; however, these estimates were created for a mass appraisal system with no intentions to supply REALTORS® as a source of square footage. While those public records are definitely the most convenient there have been some major discrepancies found when comparing appraisals, MLS listings, and public records.
The NATIONAL ASSOCIATION OF REALTORS® recommends deferring the risk by simply hiring a professional for accuracy. In addition, most if not all MLS's now contain a general disclaimer indicating that although information is believed accurate, it’s not guaranteed. We even have a caveat on some of our Forms we include in our Purchase & Sale Contracts, don't we? (IE: NWMLS Form 22D in Washington State).
While these disclaimers most certainly reduce REALTORS® liability and have quickly become a blanket protection for Brokers — how does this protect or serve the consumer? The answer could be simple depending on who you ask. In my opinion, there needs to be a National Standard for measuring square footage in Residential Real Estate. How is it possible that tax departments have used square footage for assessment purposes for the last 200 years, yet no residential "standard" has ever been established or mandated? For example, Commercial Real Estate established their first Standard of Measurement back in 1915, and today there are at least a handful of commercial measurement standards — it's 2013, and there's still NOTHING for Residential Real Estate?!
The only formal National Measurement Standard available has really only been the American National Standards Institute method, which has been around for longer than a decade — BUT, it's never been widely used by professionals. In fact, most Real Estate Professionals, including Developers, General Contractors/Builders use the American Measurement Standard (AMS), which actually dates as far back as the early 1900's. However, it was only recently formalized in writing.
Now that AMS HAS been formalized in writing, it makes complete sense [to us] for the American Measurement Standard (AMS) to officially become the "Universal Standard" for Residential Real Estate. Consider this the easement or right-of-way for that official (opposed to unspoken norm) Standard Residential Real Estate so desperately needs.
The fact is, Size Matters — Square footage (and location) has been the foundation of value found in Real Estate. A National Standard will result consistent, efficient, reproducible creation and communication of this information, which will play a significant role in the future stability of the overall Real Estate & Mortgage Markets as well as serve us, as professionals including our Clients.
We would like to hear your thoughts on this matter as well. Whether you're in the Real Estate Industry as a Professional or a Consumer — please let us know what you think in a comment below! 🙂
Realtors® consistenly report that exterior remodeling projects return the most money as a percentage of cost, which is also detailed in the Remodeling Cost vs. Value Report provided via NAR.
Without getting technical and quoting percentages, note that on a national level, "remodels" consisting of wood deck additions and all types of siding replacements – upscale fiber cement, midrange vinyl, and upscale foam-backed vinyl – returned more than 80 percent of project costs upon resale. Something to think about if you're currently selling your home or considering it…
Regardless of the trending market (Inventory or lack thereof) it is always important for a home to make a positive first impression — this translates to quality curb appeal. Realtors® understand what attracts and motivates their Buyer Clients, which is almost always eye candy at first glance. As a homeowner, taking pride in your curb appeal specifically is a smart move to take advantage of prior to putting your house on the market to ensure less time on the market and take the spot light when compared to competition. Show how much you love your home so your future Buyer can love it, too.
While you could go all out by replacing wood decks, siding, windows etc. sometimes just a fresh paint job and sprucing up your garden (or lack of) can be worth thousands — particularly in the Spring and Summer months. However, keep in mind that if there are specific areas in need of a remodel, the return in terms of resale value is almost invaluable and should seriously be considered for [potential] additional profit.
Although most regions follow national trends, the regions that consistently estimate to return a higher percentage of remodeling costs upon resale were the Pacific region of Alaska, California, Hawaii, Oregon and Washington — which is fantastic for us, isn't it?! Fret not if you're not in any of those states because the West South Central region of Arkansas, Louisiana, Oklahoma, and Texas; the East South Central region of Alabama, Kentucky, Mississippi and Tennessee; and the South Atlantic region of the District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia are ALSO included in this study (Remodeling Cost vs. Value Report) — did we leave anyone out?! 😉
Remember, the resale value of any given remodeling project depends on a variety of factors — the home's overall condition, availability and condition of surrounding properties, location, and regional economic climate and so on. So.. before putting your gloves on, schedule a consult with us since it is literally our job to view every single home on the market and to provide valuable insight into what projects and improvements will make a difference with Buyers in your area(s). 🙂