Sunday, January 15, 2012

THAT's 700 Square Feet!?!

Found this post on the other day that highlighted a great issue: measuring square footage of a property and whether, or how, to report it.

With prices above $1000 per square foot in many parts of Manhattan, we care about every inch! As mentioned in this blog post, square footage is measured in several ways. In new development condos, for instance, the square footage is measured by the floor plate. That means some of the square footage in the apartment is between the drywall and the studs, unfortunately.

In prewar apartments, square footage is often (but not always) measured from interior wall to interior wall. Why the difference?  Because floorplans for the prewar buildings are often not available. As a result, new layouts are drawn using interior wall measurements only.  So next time you see a 650 square foot prewar and a 650 square foot recent development listing, and one feels a lot bigger, you know why.

The actual issue discussed in this blog post is whether to list the square footage of a property in the marketing materials. The author tells a story of a very particular buyer who tried to back out when the actual square footage differed from the listed amount by less than 1%.  That's a pretty extreme example to me, but it happens.

A colleague of mine doesn't list square footage because she finds that people have different opinions of the same number. Instead, she asks them to tell her how much they think the space is. Predictably, answers vary all over the map.

The truth is that layout greatly affects the perception of square feet. In my opinion, potential buyers will tell you how much usable square footage they see. Does the unit have a long hallway from the entrance to the foyer? Wasted Space. Square bathroom or narrow rectangular bath? The wide square shape may be perceived as larger. Galley kitchen or open kitchen with breakfast bar? That's a toss-up. Some will count the separate kitchen as more space, while others will perceive the narrow kitchen as smaller than it really is.

I've gotten pretty good at figuring out - within 50 square feet or so, how big an apartment is. Sometimes I work forwards. For instance, if a prewar apartment has a 12' x 22' living room and a 12' x 15' bedroom, then total square footage is likely between 750 (if a galley kitchen) and 850 (if eat-in kitchen).  Other times, I work backwards. For instance, if an apartment is a full floor of a townhouse, then you take the size of the town house (ie, 20' wide by 40' long, a typical size in the West Village) and subtract 50-100 square feet for the interior staircase. A longer house makes for a bigger apartment with an interior dining room and/or a second bedroom.

One thing I do not recommend is using a "rule of thumb" or "legendary" square footage. I once knew a seller who represented that his apartment was a certain square footage because "the coop assigns one share per square foot". Unfortunately, the buyer's appraiser found that the real number was nearly 300 square feet less. The buyer cared very much about the square footage and wanted a huge price drop. Turns out he cared about the price per square foot, even though the property appraised for the contract price. He didn't want it unless he was getting a deal, even though he'd been through the apartment several times and felt it met his needs. Ultimately, the sale died.  Moral of story: do take a measuring stick and measure the apartment yourself, even if you "know" what the rough number is.

As a broker (and a person with a decent - though hardly perfect - spatial perception), I appreciate an approximate square footage in the listing information. It helps me understand whether I should even bring a customer to a specific listing, or if it would be too small. I use floorplans and photos to help me make that decision (and the more information a listing has, the more likely I am to shortlist it for a customer).

Bottom line: Measure the property, even if you have documents stating a particular square footage. Always use the word approximate. Provide more visual information to complement the square footage information (floorplans, photos, etc.). It could save your sale.

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