Where do you get your data when you get a new listing? Do you just cut and paste square footage, room sizes and school district from a previous sold or expired listing without verification? One of my Destin buyer agents just ran into this. She had written a contract on a short sale listing. Her buyer was searching around on the internet and noticed the MLS property size was about 200 square feet higher than the Okaloosa Property Appraiser website. Of course, the property appraiser website could have been wrong, and there might have been a good explanation for the discrepancy. If the seller had an appraisal, or finished rooms not reflected in public records, or measured the house, it could account for the difference. That’s what we were hoping. So my agent called the listing agent and asked, “Where did you get the square footage for this house?” Answer: “Oh, I copied it from the old MLS listing.”
Excuse me? This is a huge mistake. Here are the ramifications of not performing due diligence on listing information:
1. With a short sale, the inflated square footage might cause the short sale lender BPO to come in too high, losing the sale.
2. The buyer’s appraiser will measure the home, come in at a lower value based on less square footage, and the buyer won’t be able to get funding and close.
3. The buyer closes based one erroneous information, finds out about the error, and sues you later.
Those are just the problems I can come up with off the top of my head. I am sure there are more. You might think “Our MLS has a disclaimer that says the buyer is to verify all information”, so there is nothing to worry about. Even if that’s the case, not performing due diligence can look like negligence.