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Chairman’s Message: Duty to Disclose — The Cost of Inaccuracies, Omissions, and Exaggerations

Quincy Virgilio: MLSListings Inc 2015 Chairman

Quincy Virgilio
2017 Chairman, MLSListings

How many times have we seen listings where unqualified living space is included in the total square footage of a home? This problem actually gained national attention recently. You may have heard of Horiike v. Coldwell Banker (Southern California), a case that reached the California Supreme Court. There are many details to this case (which you can read here) and while the precedent it sets is around dual-agency, it also casts a glaring spotlight on the need for accuracy in disclosures to a prospective buyer.

Square Footage is Most Vulnerable to Inaccuracies

Square footage is often the most vulnerable property detail. Why? Because, unless a professional was brought in to conduct measurements, square footage is estimated.

  • Some agents mistakenly include garage, patio, and other non-primary living space when entering the square footage into Listing Management
  • Some agents pull in Realist data into Listing Management and don’t correct information that is blatantly inaccurate
  • Some agents rely on the seller’s memory rather than using a qualified professional to take the measurements

Providing accurate property information is not only our fiduciary duty to clients, but it’s also critical to the integrity of the data provided by MLSListings. Brokers, agents, our clients, and consumers use the MLSListings platform as the trusted source for home searches because of the accuracy of our database. Our listing information is more timely and accurate than public portals, so if you manipulate details like square footage to enhance the features or benefits of a property, you are corrupting the MLS data for everyone.

By all means, promote that a home has a 400-square-foot guest house, or patio, or converted garaged – simply note it in the private and public remarks. It’s okay, even encouraged, to also indicate whether the space is permitted. If using a third party to take measurements, in the disclosures, be sure to document the name of the person who took the measurements, the date, and how the square footage was measured.

Sellers Don’t Always Know Best

Square footage is not the only area where discrepancies may occur. A seller may unintentionally provide inaccurate information about when a roof was added or a remodel was completed because they don’t recall the correct year; however, they are liable for the conveyance of that information to buyers and their agents. It’s always safest to do a permit search on the property. BuildFax, which is offered at a discount with your MLSListings subscription, is a great tool for this, but you should also check the city or county records to ensure that you catch any permits that might be missed.

There are a number of documents, from the buyer’s inspections advisory to the seller’s advisory, that provide critical information that influences a buyer’s decision to purchase a property. Make sure that you are aware of everything that could be a potential hazard or litigation issue so that you can protect your clients and yourself.

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