I love active rain because it is a happy medium to rant, rave, and complain. So, I have a buyer who is looking for a home that it needs to be 3500 square feet or more, a pool, and a 1 story. My buyer also is in a wheelchair so he has specific needs and probably will have to do work on anything he buys.
We have been looking for over a year off and on, and we come across this bank owned property that is listed for $574,900 in a gated community and is 5572 square feet and the bank just put in about $75,000 to upgrade it. It has granite kitchen with cherry cabinets, and they redid the flooring as well as painted the home inside. My buyer becomes increasingly excited about this home so we go to see it at 9:00 PM that night. We go in and it was absolutely amazing. It had ramps and the doors were wider than normal and the master bath shower was perfect as my buyer could just roll right into the shower. No steps at all. The pool was green and the landscaping needs work, and the a/c probably needed to be replaced, but at 103$ a sq. ft when everything else in there was selling $175 a square foot it was a no brainer. So we hurry up and offer $575,000. We get it accepted. Then I start looking at the square footage as it really did not feel like a 5500 square foot home so I decided to research it. It shows a sketch of living area of 4208. Wow almost a 30% misrepresentation. Ouch. I ask the listing agent about this, and he said well even if it was 4200 square feet it is still a good deal.
Are you kidding me. A 30% misrepresentation and it is still a good deal. Is he right? yes, but my buyer is furious with myself and the listing agent. Now I know what many of you will say and that is I should have looked at the square footage prior to the offer. I did and the adjusted gross living area was 5572, but when you looked further that included the pool patio and porches.
I started looking at other listings that were bank owned not by the same listing agent, and to my surprise there was 2 more 30% misrepresentations. Is this a trend? Just because banks say they have not owned the property and that there are no warranties or representations, can they continue to do this? I guess they can, but it really stinks. It goes back to the accuracy of the MLS. Garbage in and Garbage out. The MLS is only as accurate as the information being put into it. We all need to do a better job in representing the correct information on the MLS.
David Serle
Vice President/Managing Broker
RE/MAX Services
561-912-3500 Office
561-912-3502 Direct
561-756-3104 Mobile
It's wrong that banks can misrepresent and think it's ok. Why are banks above the law?
I agree. Now banks list with a brokerage, and in this case there looked to be a bogus 2007 appraisal as well, but if they would have just looked at anything besides the tax appraiser's site they would have seen where the square footage was 4208. Thank you Dan for your comment.
My question is if the buyer loves the house, it perfectly accomodates his needs, WHY DOES HE CARE ABOUT THE SQUARE FOOTAGE? I really don't get it. Maybe I am slow, maybe my market is different. But, who cares if the square footage is off.
It's like an appraisal, it's not scientific, if measured by 3 different professionals (yourself included) I would bet you would have 3 different numbers. A 30% spread, maybe not. But if it is the perfect house and everything else is selling at $175, aren't you still getting a good deal at $136?
Problem one--Buyer has been looking for over a year. The square feet being off is bad, but it still sounds like a good deal. What do other homes for 103 bucks a square foot in your market look like? How does the home compare to other properties at 136 bucks a foot?
If the home is a bargain at 136 go for it! If the client balks, time to refer him out. I had a buyer that took almost TWO years to find a house. Needless to say I lost money on that deal. Never again.
If I could take a moment and compare that in lending industry, the new GFE laws state we have to be within 10% of the goodfaith to the HUD, if it is over the lender must pay the difference. I have always taken great pride in getting an accurate figure for the borrower.
I agree with you David, MLS can be misleading if we are not careful and we never want to mislead our clients, regardless of where the information comes from.
Thank you Jenna for your comments. You are correct in theory, but as my buyer put it when you are expecting a ferrari and you get a lexus aren't you disappointed. A Lexus is still a nice car, but it is certainly not the ferrari. Plus I would agree with you if it were only a few hundred square feet, but over 1300 square feet is almost another entire home. I agree however that if they like the home they should buy it, but its hard when you are made to believe one thing and then it is another.
Doug, thank you for your comment. I believe it is a bargain and I also believe my client will buy it as long as the bank becomes more reasonable and comes down some.
Tanya, thank you for your comment. I absolutely agree with you. We need to be more diligent in using the correct information and data when inputting it into the MLS. We are only as good as the data.