Why is there a difference in square footage between official records and the appraisal?

Last week I gave some tips on how to challenge a low appraisal, and today I’d like to point out something very obvious you ought to pay attention to in an appraisal report. If there is a big difference in square footage between the appraisal and official records (tax, assessor, county, city), it’s important to know why there is a difference, because it could hurt your wallet.

In the example below, an investor client hired me to review an appraisal on one of their recent flipped properties in Sacramento. One of the very first things I noticed was the appraiser measured 1087 square feet, but Tax Records said 1207. Since the appraiser adjusted by about $50 per square foot, it looked like this could possibly make a $5,000 difference in the report. Who was right in this case? After my client hired me to accurately measure the house, the actual GLA (gross living area) was 1207. You can see the appraiser measured the western wall at 38 feet, but it was actually 45 feet. The original appraiser ended up fixing the error and then adjusted the value up by $5,000.

There was obviously an error in the example above, but in other cases, why is there a difference between actual living area and what official records say?

  1. Builder was wrong: Official records could have been wrong from the beginning if the builder reported an inaccurate GLA for that model.
  2. Change of building plans: Sometimes building plans change, but the adapted square footage is not reported to the county, so the local authorities only have on file what was originally planned.
  3. No permits: The house may have been added on to without permits.
  4. Permit not recorded: The addition was done with permits, but for whatever reason the additional square footage was not recorded.
  5. Appraiser error: The appraiser made an error.
  6. Including the wrong stuff: Maybe official records mistakenly includes an enclosed patio, sun room, garage or something else that really shouldn’t be GLA.
  7. The 5 foot rule: There is a difference between the footprint of the house and actual square footage in cases with slanted ceilings with short walls (especially an A-frame house). It’s always important to take into consideration the “5 foot rule” for calculating square footage.
  8. Shoddy workmanship: Maybe there is a legal addition, but the workmanship is really not up to par for consideration as GLA because it doesn’t meet standards for GLA.

What other reasons might there be a difference in square footage between official records and reality?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Comments

  1. says

    Great post Ryan. In our area county records are pretty accurate for one story homes on crawlspace or slab, but when you get into 1.5 story homes that’s when inaccuracies occur. In addition, the living area in the basement is sometimes wrong for many of the reasons you listed above. Sometimes lowering your taxes is as easy as verifying the accuracy of your square footage.

    • says

      Thanks, Tom. It’s good to hear records are fairly accurate in your area. Our records are pretty good too, though it does vary from county to county since not every county publishes their records online. Sometimes it’s hard to tell how big a house is going to be too because sometimes Tax Records only lists a Gross Building Area, which may or may not include other portions that are not GLA.

  2. says

    I too have found tax records wrong and usually it appears that it is computer user error from the assessor’s office. Another error has been with new homes where the builder offers choices of a bonus room or an office versus a bedroom and yet the tax records show an error in the number of bedrooms. Happens quite a bit.

    In fact, right now I have a home buyer in Roseville where the tax records say 5 bedrooms and the listing agent unfortunately did not correct the listing since there are only 3 bedrooms and a large bonus room that could have possibly been 2 additional bedrooms had the homeowner made that choice.

    • says

      You are so right, Gena. Thanks for the comment. I see records off quite a bit from builders. Sometimes an optional 300 square feet was planned too, but it didn’t end up happening. Usually the error seems to be with bed count as you mentioned, but sometimes it’s even with GLA.

  3. Lawrence Roscoe says

    Very good article…as having been on both sides of the fence I can tell you there is just plenty of error to go around, both privately and publicly. Many times Assessors do not get interior access…and therefore use a formula to estimate second story footage. In our office, we will gladly remeasure any house upon request without a formal appeal if the taxpayer feels we are in error. It is important to help your local government have these records as accurate as possible, even if the market value/taxable value of your home remains unchanged. Many private companies “ping” off official records for things such as internet searches, (the awful) home price estimators, and FSBO searches. If you have a 4 bedroom house that is accidentally listed as 3…if you go to sell your house, potential 4BR buyers will not know your home is available.

    This is one place where appraisers could do their clients a very valuable service by faxing a copy of a sketch to the office to make necessary adjustments if the customer so desires you to do so.(USPAP and confidentiality notwithstanding) At the very least, inform the homeowner of the discrepancy, so that they may remedy it if they so choose.

    • says

      Thanks for your comment, Lawrence. I appreciate your insight from a guy who has had his feet in both worlds. I am really glad to hear your office offers a free service for measurement. It sure can make a difference if measurements are innacurate. Home owners would be wise to make sure their square footage is correct (of course only if the Assessor lists it too high, right?) :) You are very right about buyers not knowing about the house since MLS tends to important Tax Records and sometimes agents do not manually make the correct change on the listing.

      • Lawrence Roscoe says

        LOL, only if it is high…truth is, while most assessor’s offices manipulate a cost based model to estimate a market value of a home…do not think that every square foot is worth the same dollars. If every house in your subdivision sells between 100 and 110K, regardless of correcting square footage errors, we will not be obligated to drop the value below those neighborhood thresholds. It has to make sense before we change the valuation.

        • says

          Thanks for the inside scoop Lawrence. :) I appraised a house in the past two weeks where they had about 230 extra square feet that was not accounted for in Tax Records. Despite getting a permit and doing a great job on the adition, it just never recorded (bonus for the home owner I guess in terms of property taxes, but less of a bonus for resale). I would think the extra space would make a difference in the assesed value, but maybe not in the eyes of the Assessor. Of course the house was about 2800 square feet, so the overall addition was not even 10%.

  4. Lori Najera says

    I think those of us who list homes, should really be thorough and double check our details, before hitting that save & submit button!

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