A growing concern in the Birmingham, AL Multiple Listing Service

A growing concern in the Birmingham, AL Multiple Listing Service

With a little over a year into the implementation of the requirement to add square footage figures to multiple listingGarbage In Garbage Out sheets I see a common trend that bothers me. I frequently see inaccurate square foot figures being added to listings that will in the long run hurt the statistical data that MLS reports will produce. I write this not with the intention of pointing fingers but rather with the hope that by taking control of the accuracy of the data being entered into the MLS system the quality of future statistical reports will allow agents to do their jobs with better accuracy.

Garbage in, garbage out

Have you ever heard of this common saying? If you haven’t then let me explain. The simplest explanation is that statistical reports that are possible with MLS data will not be very accurate because of the inaccurate data added at the beginning. In other words the price per square foot reports that many agents will rely on to price their listings will not be worth much because the square foot figures added to listings is wrong to begin with.

Most people like to talk about the value of a home by looking at what its “price per square foot” is. If this data were reliable then in some situations you would be able to create a report in the MLS system that analyzed what all the homes in your neighborhood sold for on a price per square foot basis. This could potentially give a range of value that agents could use to help with their CMA’s (Comparative Market Analysis). In addition, this information is useful in calculating appreciation rates or value differences for various features.

By looking at the range, and comparing it to what a potential client might want to list their home for, you may be able convince them that what they are asking for their home does not reflect the market data. This could reduce unrealistic expectations and help a home sell quicker because it is priced in line with the market. Using data in this way is not possible when the square foot figures entered into the system is inaccurate.

What’s the solution?

I’ve written numerous posts on how to add accurate square footage to an MLS listing. In addition to the individual posts I have written, I compiled a square footage resource guide for agents that you should check out.  There are several different sources for getting this information, including county records, a previous appraisal, or getting an appraiser to measure the home. The most accurate source of information will be from the appraiser. This can be from an older appraisal, if nothing has changed with the house since it was done, or by getting an appraiser to do a current sketch of the floor plan.

Some sources, like the county records, can be fairly accurate in some situations. One must use common sense when getting this information however, I have seen 1.5 story homes listed with more square footage on the second floor even though it is smaller than the first level. We know this cannot be true, so either the information is being read wrong or the county records is wrong.

The agent will need to make the final decision based on how accurate they feel the available information is. The one thing they should keep in mind is that the more accurate information they include, the more accurate reports will be in the future that rely on this critical information.

Question

What are your thoughts on the accuracy of MLS square foot information? I would love for you to share your thoughts and as always thanks for reading.

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Comments

  1. You are right about “Garbage in, Garbage out.” Square footage is one of the most important elements when buying a house (and valuing it). Being accurate is therefore paramount.

  2. Great post Tom. The square footage data in our MLS system is inaccurate as well. Many agents are hiring me to measure their properties prior to listing. This reduces their liability, reduces failed sales, and often increases the sales price.

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