MEASURING SQUARE FOOTAGE

Based on the North Carolina Real Estate Commission Guidelines

PART ONE/DAY ONE:

Three and ½ hours classroom instruction and perform a practice measuring
exercise.

PART TWO/DAY TWO:

Three and ½ hours practical experience.

Sharon Montague, Education & Training Director & Bill Miller, a highly experienced
real estate agent in our south office, will take the students to a vacant house. The
students will be broken up into groups to measure the house with our guidance.
Each group will need a clipboard with either a legal pad or graph paper and a 100
foot tape with decimals. We measure the outside of the house first and then go
inside to see if any inside measurements are required. We point out specific areas
of concern to the agents.

We then return to the classroom and compute the measurements to determine the
square footage of the home we just measured.

PART THREE/DAY THREE

Three and ½ hours
“Reconciling Data to Determine Price”

Instructor: Bill Miller. This class walks the agents through the step by step process
of compiling all of the data needed to make a decision as to how to determine an
estimate of value of a property.

Measuring Square Footage 1

 Residential Square Footage Guidelines

Introductory Comments on Why the Commission Developed these

Guidelines

• Many problems with Reporting Square Footage. For many years, the
Real Estate Commission has received numerous complaints that involved
inaccurate reporting of square footage of homes listed for sale. Sometimes
the inaccuracy is due to carelessness on the part of the agent, or to improperly
relying on square footage reported by another party (seller, previous
listing agent, tax records, etc.); however, frequently the reason is a lack of
understanding by the agent of the proper method for determining square footage.

• No Uniform Guidelines in Use. Up to this point in time, there have

been no guidelines for determining square footage that have been
widely accepted and utilized by the real estate brokerage industry.

• In 1996, the American National Standards Institute, Inc. (ANSI) published its
Square Footage-the Method for Calculating guidelines for single-family residential
buildings. The Commission determined that certain of the standards in the ANSI
guidelines were not practical for use by real estate agents when reporting square
footage as part of the process of marketing residential properties, and would
not meet the needs of most real estate consumers. (The major problem in this
regard will be addressed later in this course). There was also a very practical
problem in that the ANSI guidelines are ANSI’s proprietary material and are not
published in a manner that makes them readily available to real estate licensees.

• Primary Purpose of Guidelines. The Commission determined that the industry

and real estate consumers would be well served by the development, publication and
distribution by the Commission of guidelines for determining and reporting the square
footage of residential properties. The primary purpose of developing, publishing
and teaching these Guidelines is to encourage greater uniformity and accuracy in
determining and reporting the square footage of residential properties. If these goals
can be accomplished, the result should be better satisfied real estate consumers
and fewer complaints and problems associated with the issue of square footage.

Comments on Legal Basis for these Guidelines

The legal basis for these Guidelines includes the following:

2 Measuring Square Footage
 • The North Carolina Real Estate License Law- more specifically, N.C. General
Statutes 93A-6(a)(1)&(8)

G.S. 93A-6(a)(1) of the Real Estate License Law deals with misrepresentation and
omission and prohibits real estate licensees from “…Making any willful negligent
misrepresentations or any willful or negligent omission of material fact…”

This statutory provision creates a duty on the part of real estate licensees to avoid
making any misrepresentation, either willfully or negligently, to others regarding a
material fact. This means that, when a licensee makes a representation, directly
or indirectly, to a party to a real estate transaction regarding a matter that may be
important to that party (e.g., square footage), then a licensee is obligated to make
certain that he/she does not provide incorrect information, either intentionally or
negligently.

G.S. 93A-6(a)(8) of the Real Estate License Law deals with licensee incompetence or
unworthiness and, among other things, has the effect of requiring that licensees possess
the minimum competence necessary to serve real estate consumers in accordance with
the law. Licensees are expected to possess the knowledge and skills necessary to
accurately calculate the square footage of most residential dwellings.

• The Common Law of Agency imposes on any real estate licensee in an agency
relationship certain duties that the licensee-agent owes to his/her principal (property
owner, buyer or tenant) as well as to third parties with whom they do business on
behalf of the principal.

• The Common Law of Torts provides for a civil cause of action against a party who
commits fraud or misrepresentation in his/her dealings with others.

Measuring Square Footage 3

 INTRODUCTION

I
t is often said that the three most important factors in making a homebuying
decision are “location,” ”location,” and “location.” Other than “location,” the single
most important factor is probably the size or “square footage” of the home. Not
only is it an indicator of whether a particular home will meet a homebuyer’s space
needs, but it also affords a convenient (though not always accurate) method for
the buyer to estimate the value of the home and compare it with other properties.

Although real estate agents are not required by the Real Estate License Law or
Real Estate Commission rules to report the square footage of properties offered for
sale (or rent), when they do report square footage, it is essential that the information
they give prospective purchasers be accurate. At a minimum, information
concerning square footage should include the amount of living area in the dwelling.

Comments on Reporting of Square Footage by Agents

• Real estate agents are NOT required by the Real Estate License Law or Real
Estate Commission rules to advertise the square footage of listed properties or to
provide an up-front disclosure of square footage to prospective buyers or tenants.
It is, therefore, permissible for an agent, a firm or a listing service to elect not to use
square footage in marketing listed properties. Listing services in some markets
around the country make it a practice to not indicate square footage in the data
shown for a listed property. Instead, they allow information on the number and type
of rooms to serve as the description of the size of the dwelling.

• The phrase “reporting square footage” means any communication of a property’s

square footage in any manner, including, but not limited to: By inclusion in any
advertising of any type; by inclusion in property data provided to a listing service
(which will be subsequently reported to prospective buyers); by inclusion in property
information sheets; or by oral communication.

4 Measuring Square Footage

 Purpose and Use of Guidelines
The following guidelines and accompanying illustrations are designed to assist
real estate brokers in measuring, calculating and reporting (both orally and in
writing) the living area contained in detached and attached single-family residential
buildings. When reporting square footage, real estate agents should carefully follow
these Guidelines or any other standards that are comparable to them, including
those approved by the American National Standards Institute, Inc. (ANSI) which
are recognized by the North Carolina Real Estate Commission as comparable
standards. * Agents should be prepared to identify, when requested, the standards
used.

* The following materials were consulted in the development of these Guidelines:

The American National Standard for Single-Family Residential Builidngs: Square
Footage-Method for Calculating approved by the American National Standards
Institute, Inc.; House Measuring & Square Footage published by the Carolina
Multiple Listings Services, Inc.: and materials compiled by Bart T. Bryson, MAI,
SRA, and Mary L.D’Angelo.

Comments on Use of the Commission’s Guidelines

• When square footage is being reported, an agent is NOT absolutely required to

use either the Commission’s Guidelines or the ANSI guidelines. An agent may use
any method he/she desires to calculate the square footage so long as the square
footage is calculated and reported correctly. NOTE, HOWEVER, the following
comments.

• The question of what guidelines were used by an agent is likely to arise only when
there is a question raised about the accuracy of reported square footage. When
considering a complaint against an agent to demonstrate from his/her personal
transaction records the method used to determine the square footage. The agent
should be able to demonstrate that he/she used either the Commission’s Guidelines
or other comparable guidelines.

An agent who makes a reasonable and conscientious attempt to personally measure

a dwelling and calculate its square footage in accordance with the Commission’s
Guidelines, but who makes an honest mistake in the process,

Measuring Square Footage 5

 will clearly fare better with the Commission than an agent who makes a similar
mistake but can not demonstrate use of the Commission’s Guidelines (or comparable
guidelines) when determining the square footage, or worse, who simply relies on
information obtained from an unreliable source and makes no effort to personally
verify the square footage.

• Factors the Commission Will Consider. When considering whether or not an agent
acted reasonably to assure the accuracy of his/her representation as to square
footage, the Commission will consider such factors as:

• Was the agent the listing agent or an agent working with the buyer who was
showing someone else’s listing?
• Did the agent have full access to the property?
• How complex is the design of the dwelling? (Or, how difficult is it to measure and
accurately calculate the square footage of the dwelling?)
• Do these Guidelines provide guidance sufficient for a reasonably knowledgeable
and prudent agent to accurately measure and calculate the square footage of the
particular dwelling?
• What was the size and percentage of the error in reported square footage?
• How reasonable were the judgments made by the agent when determining the
square footage?

Applications of Guidelines to RENTAL Transactions

• The Guidelines generally make reference to their application to sales transactions;

however, the Guidelines are considered to be equally applicable to rental
transactions.

• Licensees engaged in the management of apartments are especially cautioned to

make sure the advertised square footage for units they manage is correct. It is fairly
common for the owners or developers of apartment complexes to provide property
management personnel with property information that includes in the reported
square footage for units areas such as outside storage rooms or balconies that are
part of the area under a tenant’s exclusive control but clearly are not considered
part of “living area” under these Guidelines.

6 Measuring Square Footage

Comments on Listing Agent’s Basic Duty and Responsibility for Accuracy
of Reported Square Footage

• In any real estate transaction, the listing agent has the primary responsibility for
assuring that square footage information he/she reports is accurate. The listing
agent is the real estate licensee in the best position to ascertain the correct square
footage of a listed dwelling, as well as other information on the characteristics and
condition of the property. Note also that the listing firm shares fully the responsibility
of the individual listing agent in this regard.
• Duty to personally measure and calculate square footage. A listing agent who reports
the square footage of a dwelling without personally measuring and calculating the
square footage greatly increases his/her potential exposure to Commission disciplinary
action (and probably also to civil liability) in the event the reported square footage is
incorrect to any significant degree. The more unreliable the source of square footage
information adopted by the agent, the greater the potential exposure of the agent.
• Responsibility for the errors of others. Square footage information taken from tax records
is likely to be highly unreliable, and square footage information obtained from the seller
or from a previous listing may also be unreliable. The square footage reported by a State-
licensed or State-certified appraiser in an appraisal report (assuming there have been no
additions to the dwelling) is likely to be considerably more reliable than the above-mentioned
sources, but still might be in error or not derived in accordance with the Commission’s
Guidelines. It is important to emphasize that when a listing agent relies on the square
Measuring Square Footage 7
 footage determined by another person, the agent assumes full responsibility for
the accuracy of that person’s square footage measurements and calculations.
• Responsibility to verify accuracy of advertised square footage. A listing agent is
expected to verify that the square footage reported in any form of advertising, including
MLS property sheets and data banks, is correct. It is no defense for the listing agent
to claim that a clerk made a mistake when entering the data.
• Absolute perfection in reporting square footage accurately is NOT expected!!
The Commission realizes that any five competent agents who might be asked to
determine the square footage of even an average house may very well come up with
five different answers. However, if the Guidelines are followed, the differences should
be slight and insignificant.
• There is no fixed margin of acceptable error. Contrary to popular belief, the
Commission does not have a fixed acceptable percentage of error that agents
can rely on. The percentage of error that would be considered acceptable varies
according to the design and characteristics of each particular dwelling. For example,
a relatively small error of only a few percentage points in a dwelling with a simple
rectangular design and no particularly unusual or complex design characteristics may
be considered a significant error. On the other hand, a somewhat larger degree of
error might be acceptable for a dwelling that is odd-shaped or has many unusual
features that substantially complicate the process of measuring and calculating square
footage. The Commission will apply a “reasonably knowledgeable and prudent agent”
standard when considering complaints involving errors in reporting square footage.
• A “range” may be used when reporting square footage. Remember, there is no
requirement that square footage be advertised or disclosed up front. Consequently,
if a listing agent or listing service chooses to report square footage as a range, then
this is acceptable. Note, however, that reporting square footage as a range, then this
is acceptable. Note, however, that reporting square footage as a range may not be
satisfactory to many prospective buyers! Also, MLS systems may not be designed to
permit entry and reporting of a range.
• Suggestion to licensees: If you don’t know how to properly calculate the square footage
of some portion of a particular property, and you can’t obtain reliable, competent
assistance to solve the problem, either don’t report the square footage or report the
square footage as a range.

8 Measuring Square Footage
Comments on Duty Agents Working with Buyers

• Reliance on listing data. The Commission recognizes that it is totally impractical

and unreasonable to require an agent working with a buyer to routinely verify the
square footage of all properties shown to the buyer. Thus, the Guidelines provide that
an agent working with the buyer is a seller’s agent or a buyer’s agent!

In a substantial majority of transactions, an agent working with a buyer will be able

to rely on the square footage information provided by the listing agent and will not be
expected to personally verify the square footage, even if the agent is a buyer’s agent.
However, when there is a “red flag” situation, the agent working with the buyer then
has a duty to verify the square footage.

• “Red Flag”-What is meant by this term?

A “red flag” situation exists when there is an error in reported square footage that
should be obvious to a reasonably prudent agent showing a dwelling to a prospective
buyer.

Example 1: A simple rectangular house with only 1200 square feet has a reported
square footage of 1450 (a 21% error). A reasonably prudent agent should probably
recognize this problem when showing the house.

Example 2: An average-size house with common design features has a large

unfinished room (e.g., an enclosed porch) that was improperly included in the reported
square footage. A reasonably prudent agent should recognize the square footage
error when showing the house.

Example 3: During a showing, the agent notices that the listing data shows the
Measuring Square Footage 9
 dimensions of the living room to be 30’x 15’, but the agent or buyer notices that the
room appears shorter, and upon checking, finds the room dimensions to actually be
20’ x 15’. This should probably serve as a “red flag” to a reasonably prudent agent,
who should check to make sure the error in reported room dimensions is not reflected
in the reported square footage for the dwelling.

• Corrective Action in “Red Flag” Situations:

1. The first action to be taken by an agent working with the buyer when he/she
encounters a “red flag” situation is to promptly point out the suspected error to both
the buyer and the listing agent. The appropriate action for agents to take after that
is determined primarily by their agency status.

2. The listing agent, upon being alerted to the potential problem, must then recheck
the reported square footage and correct any error in the information reported.
The listing agent will want to make sure all prospective buyers have the corrected
information.

3. A seller’s subagent working with the buyer may rely on the verified or corrected
square footage figure reported by the listing agent after being alerted to the “red
flag.”

4. A buyer’s agent, under agency law, has a higher duty to the buyer than does
a seller’s subagent working with a buyer. Consequently, it is not sufficient for a
buyer’s agent to simply report a suspected problem to the listing agent and then rely
on the listing agent’s rechecking of the square footage. Under the Guidelines, when
there is a “red flag,” a buyer’s agent must independently measure and calculate the
square footage if the buyer has any further interest in the dwelling. The buyer’s
agent must then advise the listing agent of any errors he/she finds.

Note: As a practical matter, the agent working with the buyer can frequently find the
error very easily and then simply report the problem and the correct square footage to
the listing agent and buyer. When it is very easy for the agent working with the buyer to
personally check the reported square footage, even a seller’s subagent may want to do
so prior to contacting the listing agent, especially if the buyer is particularly interested in
the property and/or if the agent’s firm listed the property.

• Square Footage Questions Raised by the Buyer

Query/Discussion Point: What should an agent working with a buyer do when the

10 Measuring Square Footage

buyer raises a question about the reported footage? When does such a question create
a “red flag” situation?

Answer/Comment: Every question raised by a buyer about the reported square footage
does not necessarily constitute a “red flag” under the Commission’s Guidelines. Common
sense must prevail in these situations.

Example 1: An agent showing a house notices no “red flag” regarding the square footage.
The buyer, however, makes the following comment to the agent: “Some of these rooms
seem awfully small. Do you think this house really has 2250 square feet?” Is the agent
required to personally verify the square footage?

Answer/Comment: The agent working with the buyer would have no duty under the Real
Estate License Law and these Guidelines to verify the reported square footage, even if the
agent is a buyer’s agent, unless the buyer can provide some logical reason for suspecting
the square footage is incorrect. The buyer’s “gut feeling,” standing alone, is not enough to
constitute a “red flag.” (If the agent shares the buyer’s “gut feeling,” then maybe the agent
should double-check the square footage.) It is very likely that in this situation a buyer’s
agent would also have no duty under the common law of agency to personally verify the
square footage. The agent should, however, be especially alert for “red flags” whenever
a buyer has raised any question about the accuracy of reported square footage. The
agent should explore with the buyer why the buyer thinks the reported square footage
is incorrect. Most often, the buyer’s concern can be easily resolved without the agent
having to measure the entire house and completely recalculate the square footage.

Example 2: A buyer is very interested in making an offer on a listed house and the
buyer asks the agent working with him/her to verify the reported square footage. Upon
questioning the buyer, it becomes apparent to the agent that the buyer has no particular
reason for questioning the reported square footage, but the buyer says it is very important
to him/her to know the exact square footage, and the buyer insists that he/she would like
for the agent to make sure the reported figure is correct. The agent notices no “red flag.”
Is the agent required to personally verify the square footage?

Answer/Comment: If the agent is a buyer’s agent, the agent is obligated to personally

verify the reported square footage. Agency law duties require an agent to comply with his/
her principal’s reasonable instructions and to exercise skill, care and diligence in serving
the principal. Unlike the situation in Example 1, where the buyer casually questioned
the square footage and wasn’t that concerned about it, here the buyer clearly expressed
Measuring Square Footage 11
major concern about the square footage and emphasized its importance to him/her.

On the other hand, if the agent is a seller’s agent, the agent is NOT legally obligated to
honor the buyer’s request and personally verify the square footage.
Note: As a practical matter, an agent working with a buyer, regardless of his/her
agency status, will obviously need to do something to satisfy the concern of the buyer in
Example 2 above. Typically, concerns expressed by a buyer about the reported size of
the property will focus on a particular room or area rather than the total reported square
footage for the entire dwelling. In those very common situations, the agent working
with the buyer should simply measure and calculate the square footage of the entire
dwelling. However, it may occasionally be necessary for an agent working with a buyer
to verify the square footage just to satisfy the buyer, even if the agent is a seller’s agent
and has no legal obligation to do so. One possibility is for the agent to suggest that he/
she and the buyer measure the house together.

Inexperienced Agents and Unusual Situations

Real Estate agents are expected to be able to accurately calculate the

area of most dwellings. Agents who are inexperienced in calculating
square footage should seek the assistance of their broker-in-charge or
more experienced agents. And where a complex, odd-shaped dwelling
is involved, which presents measuring problems not contemplated by
these Guidelines, even experienced agents should seek the help of a
State-licensed or State-certified appraiser or an experienced engineer or
architect to assist them in solving the problem.

12 Measuring Square Footage


Comments on Inexperienced Agents and Unusual Situations

• The Commission expects licensees to have the knowledge and ability to personally
measure and accurately calculate the square footage of dwellings to the extent that
the square footage problem they are facing is one contemplated by the concepts
and methods presented in these Guidelines. The Commission recognizes, however,
that inexperienced agents will generally need more assistance from their broker-in-
charge or other more experienced agents. The Commission also recognizes that the
Guidelines do not address every situation that an agent might encounter. Thus, any
agent, regardless of their experience, may occasionally need to seek assistance from
others when they are confronted with an unusual situation not addressed by these
Guidelines.

• A licensee who makes a conscientious effort to personally determine square footage

using these Guidelines and who seeks assistance when uncertain how to solve an
unusual problem will always fare better before the Commission than a licensee who
does not do these things.

• Caution: Remember that agents who simply rely on the square footage determined
by another person will be held strictly accountable for any errors made by the other
person.

Agents Who Choose to NOT Report Square Footage

In areas where the prevailing practice is to report square footage in the
advertising and marketing of homes, agents whose policy is NOT to calculate
and report square footage must disclose this fact to prospective buyer and
seller clients before entering into agency agreements with them.

Comment on Agents Who Choose to NOT Report Square Footage

• The logic behind this position is that a real estate seller should be able to expect to
receive from a listing firm the level of service that is customary in their community
unless the firm has contracted with the seller to provide a lesser level of service.
Clearly, in a market where square footage is routinely advertised, the failure to
advertise square footage for a dwelling would place the owner of that dwelling at a
competitive disadvantage.
Measuring Square Footage 13
 MEASURING

General Rule

T
he amount of living area and “other area” in dwellings is based upon exterior
measurements.

General Procedures and Suggestions

• A one-hundred-foot-long tape measure is recommended for use in measuring

the exterior of dwellings, and a thirty-foot retractable tape for measuring interior and
hard-to-reach spaces. A tape measure that indicates linear footage in “tenths of a
foot” will greatly simplify your calculations. For best results, take a partner to assist
you in measuring. But if you do not have someone to assist you, a screwdriver or
other sharp tool can be used to secure the tape measure to the ground.

• Begin at one corner of the dwelling and proceed with measuring each exterior
wall.

• Round off your measurements to the nearest inch (or tenth-of-a-foot if your
tape indicates footage in that manner).

• Make a sketch of the structure. Write down each measurement as you go, and
record it on your sketch. A clipboard and graph paper are helpful in sketching the
swelling and recording the measurements.

• Measure living area and “other area,” but identify them separately on your sketch.

• Look for offsets (portions of walls that “jut out”), and adjust for any “overlap” of
exterior walls (Fig. 3) or “overhang” in upper levels (Fig. 5).

• Exception to using exterior measurements: When you cannot measure an

exterior surface (such as in the case of attics and below-grade areas), measure the
perimeter walls of the area from the inside of the dwelling. Remember to add six
inches for each exterior wall and interior wall that you encounter in order to arrive at
the exterior dimensions (Fig. 2, 3, 4, 6).

14 Measuring Square Footage

• Measure all sides of the dwelling, making sure that the overall lengths of the front
and rear sides are equal, as well as the ends. Then inspect the interior of the
dwelling to identify spaces which cannot be included in the living area.

• You may also find it helpful to take several photographs of the dwelling for later use
when you return to your office.

CALCULATING SQUARE FOOTAGE

F
rom your sketch of the dwelling, identify and separate living area from “other
area.” If your measurements are in inches (rather than tenths-of-a-foot), convert
your figures to a decimal as follows:

1”= .10 ft. 7”= .60 ft.

2”= .20 ft. 8”= .70 ft.
3”= .25 ft. 9”= .75 ft.
4”= .30 ft. 10”= .80 ft.
5”= .40 ft. 11”= .90 ft.
6”= .50 ft. 12”= 1.00 ft.

Calculate the living area (and other area) by multiplying the length times the width of
each rectangular space. Then add your subtotals and round off your figure for total
square footage to the nearest square foot. Double-check your calculations. When
in doubt, re-check them and, if necessary, re-measure the house.

Comment on Accuracy in Measuring and Calculating

• You may be wondering why the Guidelines call for measurements to the nearest
inch or tenth of a foot and rounding off total square footage to the nearest square
foot when you have already been told that absolute precision in reporting square
footage is not essential. It is true that the Commission is not concerned about
very small, insignificant errors and will be reasonable in its expectations regarding
accuracy of reported square footage. Nevertheless, licensees should still strive
to be as accurate as possible when determining square footage. Several small
errors can be compounded into a significant error if one is not careful.

Measuring Square Footage 15

 Basic Area Calculations and Illustrations

R e c ta n g l e ( o r S q u a r e )

Area=Length x Width
Area=20x10
Area=200 Square Feet
10’

20’

Circle

Area=Π R2
R (radius)= ½ Diameter
(1/2 x 20=10)
(Pi) = 3.14
Area= 3.14 x 102
Area= 3.14 x (10x10)
20’ Area= 314 Square Feet

16 Measuring Square Footage

Triangle

Area=Base x Height ÷ 2
Area=10 x 15 ÷ 2
Area=150 ÷ 2
15’ Area=75 Square Feet

10’

Area= Base x Height ÷ 2

Area=25 x 10 ÷ 2
-
- Area=250 ÷ 2
- 10’ Area=125 Square Feet
-
-
-
-
-

25’

Measuring Square Footage 17

Trapezoid
Area = (Base A + Base B) ÷ x
Height
Area = (20+30) ÷ 2 x 15
20’ Area = 50÷ 2 x 15
Base A Area = 25 x 15
Area = 375 Square Feet

15’

Base B
30’

Alternative Solution
1. Divide Area into a Rectangle and a Triangle
2. Calculate Area of Rectangle (20 x 15 = 300)
3. Calculate Area of Triangle (10 x 15 ÷ 2 = 75)
4. Add Results of Steps 2 and 3
(300 + 75 = 275 Square Feet)

20’
-
-
-
15’ -
-
-
-
-
-
20’ - 10’

18 Measuring Square Footage

 LIVING AREA CRI TERI A

L
iving area (sometimes referred to as “heated living area” or “heated square
footage”) is space that is intended for human occupancy and is:

1. Heated by a conventional heating system or systems (forced air, radiant, solar, etc.)
that are permanently installed in the dwelling-not a portable heater-which generates
heat sufficient to make the space suitable for year-round occupancy;

2. Finished, with walls, floors and ceiling of materials generally accepted for interior
construction (e.g., painted drywall/sheet rock or paneled walls, carpeted or hardwood
flooring, etc.) and with a ceiling height of at least seven feet, except under beams,
ducts, etc. where the height must be at least six feet four inches [Note: In rooms
with sloped ceilings (e.g., finished attics, bonus rooms, etc.) you may also include as
living area the portion of the room with a ceiling height of at least five feet if at least
one-half of the finished area of the room has a ceiling height of at least seven feet.];
and

3. Directly accessible from other living area (through a door or by a heated hallway
or stairway).

Comments on “Heated” Standard

• Basic Rule: If an area does NOT have a conventional heating system, do
NOT include the area as “living area.”

• Exception: For a dwelling with no conventional heating system that is

intended only for summertime (warm season) use in an area that is very
warm all season (for example, a beach cottage), it is acceptable to report

Measuring Square Footage 19

 the unheated square footage as “living area” provided an appropriate note is included
in the remarks section of MLS data and any prospective buyer is advised that there
is no conventional heating system.

Comments on “Rooms with Sloped Ceilings”

• It is important for agents to be careful when applying the living area criteria to rooms
with sloped ceilings. Such rooms are frequently encountered, but they also frequently
do not fully satisfy the living area criteria. Special attention must be paid to properly
determining if a room with a sloped ceiling meets the ceiling height criteria and to
determining the amount of square footage to include in living area for rooms that
satisfy all the criteria.

“Above-grade” and “Below-grade”

Real Estate appraisers and lenders generally adhere to more detailed criteria in arriving
at the living area or “gross living area” of residential dwellings. This normally includes
distinguishing “above-grade” from “below-grade” area, which is also required by many
multiple listing services. “Above-grade” is defined as space on any level of a dwelling
which has living area and no earth adjacent to any exterior wall on that level. “Below-
grade” is space on any level which has living area, is accessible by interior stairs, and
has earth adjacent to any exterior wall on that level. If earth is adjacent to any portion
of a wall, the entire level is considered “below-grade.” Space that is “at” or “on grade” is
considered “above-grade.”

Reporting a Single “Living Area” Square Footage Figure

While real estate agents are encouraged to provide the most complete information
available about properties offered for sale, the Guidelines recognize that the separate
reporting of “above-grade” and “below-grade” area can be impractical in the advertising
and marketing of homes. For this reason, real estate agents area permitted under these
Guidelines to report square footage of the dwelling as the total “living area” without
a separate distinction between “above-grade” and “below-grade” areas. However, to
help avoid confusion and concern, agents should alert purchasers and sellers that the
appraisal report may reflect differences in the way living area is defined and described
by the lender, appraiser, and the North Carolina Building Code which could affect the
amount of living area reported.
20 Measuring Square Footage
Comments on Allowing the Reporting of a Single “Living Area” Square
Footage Figure

• The square footage guidelines for single-family residential dwellings developed by

the American National Standards Institute, Inc. (ANSI) call for the square footage
of living area to be reported separately as “above-grade” and “below-grade” rather
than as a single figure for total living area. This is also the practice followed by
appraisers (and possibly some others), and the Uniform Residential Appraisal Report
(URAR) standard form used for most residential appraisals calls for separate entries
for “above-grade” and “below-grade.”

• Although the Commission understands the logic behind this practice, the Commission
believes it is in the best interest of both real estate consumers and licensees to permit
the reporting of the square footage of a dwelling as a single figure for the total living
area when homes are being advertised and marketed. Reporting of square footage
as “above grade” and “below grade” would be unnecessarily confusing to many real
estate consumers. A characterization of portions of a property as “below grade” can,
in some instances, be quite misleading and could be prejudicial to the property owner.

• Agents should, however, make it a practice to advise sellers and buyers that they may
encounter appraisal reports with the square footage reported as “above-grade” and
“below-grade.”

Measuring Square Footage 21

Primary Space Included in Living Area-Finished Rooms Used for
General Living

Determining whether an area is considered living area can sometimes be confusing.

Finished rooms used for general living (living room, dining room, kitchen, den,
bedrooms, etc.) are normally included in living area. For other areas in the dwelling,
the determination may not be so easy. For example, the following areas [shown on
the next two pages] are considered living area if they meet the criteria (i.e. heated,
finished, directly accessible from living area):

Examples of Other Space Included in “Living Area”

If the Living Area Criteria is Met
o Attic, but note in the listing data that the space is located in an attic (Fig. 2).
[Note: If the ceiling is sloped, remember to apply the “ceiling height” criteria.]

o Basement (or “Below-Grade”), but note in the listing data that the space is
located in a basement or “below-grade” (Fig. 1). [Note: For reporting purposes,
a “basement” is defined as an area below the entry level of the dwelling which is
accessible by a full flight of stairs and has earth adjacent to some portion of at
least one wall above the floor level.]

o Bay Window, if it has a floor, a ceiling height of at least seven feet, and otherwise
meets the criteria for living area (Fig. 2).

o Bonus Room (e.g., Finished Room over Garage) (Fig. 3). [Note: If the ceiling is
sloped, remember to apply the “ceiling height” criteria.]

o Breezeway (enclosed).

22 Measuring Square Footage

o Chimney, if the chimney base is inside the living area. If the chimney
base is outside the living area but the hearth is in the living area,
include the hearth in the living area but not the chimney base (Fig. 1).

o Closets, if they are a functional part of the living area.

o Dormers (Fig. 6).

o Furnace (Mechanical) Room, also, in order to avoid excessive

detail, if the furnace, water heater, etc. is located in a small closet in
the living area, include it in living area even if it does not meet other
living area criteria (Fig. 4).

o Hallways, if they are a functional part of the living area.

o Laundry Room/Area (Fig. 6).

o Office (Fig. 1).

o Stairs, if they meet the criteria and connect to living area (Fig. 1, 2,
3, 4, 5, 6). Include the stairway with the area from which it descends,
not to exceed the area of the opening in the floor. If the opening
for the stairway exceeds the length and width of the stairway, deduct
the excess open space from the upper level area. Include as part of
the lower level area the space beneath the stairway, regardless of its
ceiling height.

o Storage Room (Fig. 6).

Measuring Square Footage 23

Comments on Stairs
Basic Rule #1- Include as part of the lower level area the space beneath the stairway,
regardless of its ceiling height.
• If the lower level from which a stairway ascends is living area, the area occupied by
the stairway, including all space directly beneath the stairway, is always included in the
lower level square footage for living area.

Basic Rule #2- Include the stairway with the area from which it descends, not to exceed
the area of the opening for the stairway exceeds the length and width of the stairway,
deduct the excess open space from the upper level area.
• If the upper level from which a stairway descends is living area, and the opening for
the stairway on the upper level is no larger than the total area occupied by the stairway,
then there is no deduction from the square footage for the upper level living area. Note:
A vast majority of stairways have openings to the upper level that are smaller than
the total area occupied by the stairway and no adjustment to the upper level square
footage will be necessary.
• A stairway opening on the upper level that is larger than the area occupied by the
stairway is found in dwellings that have vertical interior open space with the stairway
located in the open area, such as a dwelling with an open foyer.
• When the opening on the upper level that is larger than the area occupied by the
stairway is found in dwellings that have vertical interior open space with the stairway
located in the open foyer.
• When the opening on the upper level is larger than the area occupied by the stairway,
only include the area of the stairway (as determined on the lower level) in the square
footage for the upper level. In other words, the portion of the opening on the upper
level that exceeds the area of the stairway is NOT included in the square footage for
the upper level.

Suggestions for Measuring Stairways in an Open Foyer or Other Open Space

Straight Stairway- Standing on the lower level, measure from the bottom of the stairs to
the point beneath the stairs where the stairs connect to the upper level to determine the
length of the area occupied by the stairs, then multiply the length by the width of the stairs.
Stairway with Angled Turn (“Dogleg”) – Divide the stairway into sections and measure in
the manner described for a straight stairway, then add together the figures for each section. If
the turn in the stairway forms an angle that is less than a right angle, it is acceptable to “square
off” the turn and calculate the area of each section as a rectangular-shaped area rather than to
calculate the area of each section as a trapezoidal-shaped area.
Curved Stairway- Standing on the lower level, measure beneath the stairway along the

24 Measuring Square Footage

line of the curve as best you can to determine the length of the area occupied by the
stairs, then multiply the length by the width of the stairs.

Stairs that “Flare Out” at the Top or Bottom – For the portion of the stairs that
“flare out,” use an average width determined by measuring the width of the stairs at
the middle of the section that flares out. Unless the “flare out” portion of the stairs is
significantly wider than the rest of the stairs, it is also acceptable to simply ignore the
flared-out area and to treat the stairs as though they were straight.

Spiral Stairway- A true spiral stairway has a two-dimensional floor area in the shape
of a circle. The technically correct way to determine the area is to determine the
radius (one-half the diameter) of the stairway’s floor area and apply the formula for
determining the area of a circle. It is also acceptable to “square off” the floor area
beneath the spiral stairway, thus creating a square, and to use the figure calculated for
the square area.

Measuring Square Footage 25

 OTHER AREA

N
ote that in the listing data and advise purchasers of any space that does NOT
meet the criteria for living area but which contributes to the value of the dwelling;
for example, unfinished basements, unfinished attics (with permanent stairs),
unfinished bonus rooms, shops, decks, balconies, porches, garages, and carports.

HELPFUL HINTS
Ducts, Chases, Returns, etc.

C
oncealed in the walls of nearly all residential construction are pipes, ducts,
chases, returns, etc. necessary to support the structure’s mechanical systems.
Although they may occupy living area, to avoid excessive detail, do not deduct
the space from the living area.

Room Additions and Other Structural Modifications

When measuring and reporting the living area of homes, be alert to any remodeling,
room additions (e.g., an enclosed porch) or other structural modifications to assure
that the space meets all the criteria for living area. Pay particular attention to the
heating criteria, because the heating system for the original structure may not be
adequate for the increased square footage. Although agents are not required to
determine the adequacy of heating systems, they should at least note whether there
are heat vents, radiators, or other heat outlets in the room before deciding whether to
include the space as living area.

Comments on Room Additions and Other Structural Modifications

• Note that the “heated” living area standard frequently comes into question with regard
to room additions or remodeled areas such as sunrooms, enclosed porches, converted
garages and attics. Listing agents should always inquire about the heating system for
areas such as these that frequently do not have conventional heating systems.
• The Commission does not expect licensees to possess the expertise to determine
whether a conventional heating system is truly adequate, nor is it necessary for a
licensee to consult with a heating and air conditioning specialist when a question
arises about heating. Licensees are, however, expected to be a (1) recognize
whether or not an area has a “conventional” heating system and (2) employ a
common sense approach to determining whether an area is adequately heated. If
a licensee enters a freezing cold room in the winter, it is reasonable to expect that
licensee to at least make an appropriate inquiry into the matter. (Try turning on the
heat and seeing if it warms up!)
26 Measuring Square Footage
Common Wall between Living Area and “Other Area”

When an area that is NOT part of the living area (e.g., a garage) shares a common
wall with the living area, treat the common wall as the exterior wall for the living
area; therefore, the measurements for the living area will include the thickness of the
common wall, and the measurements for the other area will not.

Vertical Interior Open Space (e.g., Open Foyer)

Interior space that is open from the floor of one level to the ceiling of the next higher
level is included in the square footage for the lower level only. However, any area
occupied by interior balconies, lofts, etc. on the upper level or stairs that extend to the
upper level is included in the square footage for the upper level.

Comment on Vertical Interior Open Space

• House designs with vertical interior open space such as an “open foyer”
are becoming increasingly more popular in new houses and are causing
significant problems in situations where agents (and builders, designers,
appraisers, and others) don’t know how to properly determine the square
footage of houses with such a feature. Agents need to be especially
careful when determining the square footage of houses with vertical
interior open space. Sometimes the open space covers a very large area,
not just the foyer, and improper treatment of such space can produce a
very large error in reported square footage. Because the reported square
footage of houses with vertical interior open space is frequently in error,
any agent working with a buyer, especially a buyer’s agent, should be
especially alert to the possibility that the reported square footage may be
incorrect.

Measuring Square Footage 27

 ATTACHED DWELLINGS
When measuring an “attached” single-family home (e.g., townhouse,
duplex, condominium, etc.), use the same techniques just described. If
there is a common wall, measure to the inside surface of the wall and
add six inches. [Note: In the case of condominiums, do not include the
thickness of exterior or common walls.] Do not include any “common
areas” (exterior hallways, stairways, etc.) in your calculations.

Comment on Measuring Condominiums

• It is legally possible for a condominium to be defined in the recorded plat
for the condominium regime in such a manner that a portion of exterior
walls, rather than merely interior space, would be owned by the unit
owner. Agents are not, however, expected to check the recorded plat
in the register of deeds office. The best practice is for agents to simply
measure “paint-to-paint” and to not include the thickness of any exterior
walls or common walls.

PROPOSED CONSTRUCTION
For proposed construction, your square footage calculations will be
based upon dimensions described in blueprints and building plans. When
reporting the projected square footage, be careful to disclose that you have
calculated the square footage based upon plan dimensions. Therefore,
the square footage may differ in the completed structure. Do not rely on
any calculations printed on the plans.

Comments on Using Blueprints or Building Plans

• Agents may safely rely on blueprints or building plans for determining

square footage only for proposed construction or for dwellings which
are not sufficiently completed to measure accurately. Once a dwelling
has been built, the agent must measure the structure and calculate the
square footage. If blueprints are used to determine the square footage
of a proposed dwelling for purposes of marketing, then the listing agent
should personally verify the square footage after construction is complete
if the sale of the dwelling has not already been closed.

• The reason for permitting only limited reliance on blueprints and building

28 Measuring Square Footage

 plans is that changes are very commonplace during the construction process, and
some of these changes can be substantial.

ILLUSTRATIONS

F
or assistance in calculating and reporting the area of homes, refer to the
following illustrations showing the lising area shaded. To test your knowledge,
an illustration and blank “worksheet” for a home with a more challenging floor
plan has also been included. [See figure 8.] (Following completion of the class
exercise, your instructor will review with you a completed “worksheet” for the Practice
Floor Plan.)

In reviewing the illustrations, assume that for those homes with basements, attics, etc.
the exterior measurements shown have been derived from interior measurements
taking into account walls and partitions (see page 16). Where there is a common
wall between living area and “other area” (see page 30). the measurements shown in
the illustrations include the thickness of the common wall in living area except in the
condominium example where the wall thickness is not included.

Measuring Square Footage 29

INTRODUCTION
On July 1, 1999, the North Carolina Real Estate Commission published a booklet
titled Residential Square Footage Guidelines. For many years, the Commission
received numerous complaints involving the inaccurate reporting of square footage for
homes listed for sale. The inaccuracies were the result of various problems, including:
Carelessness on the part of the agent, particularly the listing agent, when measuring
a house and calculating square footage; a lack of understanding by the agent of the
proper method for determining square footage; improper reliance on the square footage
reported by another party (e.g., seller, previous listing agent, tax records, etc.); and the
absence of generally acceptable guidelines for determining square footage. The primary
purpose of the Guidelines is to assist real estate licensees and encourage greater
uniformity and accuracy in determining and reporting the square footage (“living area”)
contained in single-family residential buildings/units.
The Guidelines were taught in the 1999-2000 Real Estate Update Course and are being
taught in the Salesperson Prelicensing Course. They generally have been very well
received by licensees and are believed to have improved substantially that accuracy of
reported square footage for residential properties.

CONCERNS WITH “AGENTS’ RESPONSIBILITY” SECTION OF RESIDENTIAL

SQUARE FOOTAGE GUIDELINES
During 2000 and early 2001, the Commission became aware that many licensees
had some concerns about the “Agents’ Responsibility” section of the Guidelines,
particularly the statement that “…listing agents are expected to personally measure the
properties they list and accurately calculate their square footage” and the accompanying
statement that “The listing agent wil be held accountable for the accuracy of square
footage information the listing agent reports to prospective purchasers…” The primary
concern was that, under the Guidelines, agents, especially listing agents, were
generally expected to personally determine the square footage of dwellings in almost
every transaction without exception, and that even when the Guidelines permitted
an agent to obtain the assistance of a more qualified person, the agent would still
be held responsible for the accuracy of square footage determined by such person,
regardless of the person’s qualifications. Many licensees indicated that they believed
this expectation was too harsh and asked the Commission to consider a wider range of
circumstances under which reliance upon the expertise of others would be reasonable.
There also was some concern that the Guidelines did not provide sufficient guidance
as to the expected degree of accuracy regarding reported square footage. It is true that
reading the Guidelines alone could convey the impression that an extraordinary high
degree of accuracy was being demanded of agents when they determine and report
square footage. The Commission was asked to provide clarification in the Guidelines on
this matter.
30 Measuring Square Footage
Important Reminder
Real estate agents are NOT required by the Real Estate License Law or Real
Estate Commission Rules to report the square footage of properties offered for sale or
rent. Thus, agents may elect to not report square footage at all to clients or customers.
However, any significantly incorrect square footage that is reported either orally or
in writing would constitute a misrepresentation of a material fact (either willful or
negligent, depending on the circumstances). This is why it is very important to assure
that any reported square footage is reasonably accurate.
REVISIONS TO “AGENTS’ RESPONSIBILITY” SECTION OF RESIDENTIAL
SQUARE FOOTAGE GUIDELINES
In response to the concerns expressed by members of the industry, the
Commission made substantial revisions to the “Agents’ Responsibility” section of its
Residential Square Footage Guidelines effective May 9, 2001. In fact, the entire
section was rewritten in an effort to address the concerns mentioned above.
Presented below are portions of the actual text of the Guidelines, identified by the
specific point addressed in the quoted text of the Guidelines is labeled “Text,” is
indented on both sides and appears in italics.
BASIC COMPETENCY STANDARD EXPECTED
Text
“Real estate agents are expected to be able to accurately calculate the square footage
of most dwellings. When reporting square footage, whether to a party to a real estate
transaction, another real estate agent, or others, a real estate agent is expected to
provide accurate square footage information that was compiled using these Guidelines
or comparable standards.”
Comments
This basic general standard is the same as that expressed in the previous version of
the Guidelines. This indicates that the Commission expects any licensed real estate
agent to possess the knowledge and skills necessary to measure and calculate the
square footage of most residential properties. As will be apparent from a reading of
the remainder of this section, the Commission recognizes that many agents may not
possess the ability to accurately determine the square footage of dwellings of complex
design or which present unusual measurement problems. An example of such a
property is the one shown in Figure 8 of the Guidelines. On the other hand, agents
should be capable of determining square footage of a substantial majority of dwellings
that have relatively common design features, such as those dwellings illustrated in
Figures 1-7 of the Guidelines.

Additionally, the above quoted text restates a point also made in the “Introduction”
to the Guidelines providing that, when square footage is reported by an agent, the
Commission expects the reported square footage to have been compiled using these
Measuring Square Footage 31
Guidelines or comparable standards.
DEGREE OF ACCURACY REQUIRED
Text
“While an agent is expected to use reasonable skill, care and diligence when
calculating square footage, it should be noted that the Commission does not expect
absolute perfection. Because all properties are unique and no guidelines can
anticipate every possibility, minor discrepancies in deriving square footage are not
considered by the Commission to constitute negligence on the part of the agent.
Minor variations in tape readings and small differences in rounding off or conversion
from inches to decimals, when multiplied over distances, will cause reasonable
discrepancies between two competent measurements of the same dwelling. In
addition to differences due to minor variations in measurement and calculation,
discrepancies between measurements may also be attributable to reasonable
differences in interpretation. For instance, two agents might reasonably differ about
whether an addition to a dwelling is sufficiently finished under these Guidelines to be
included within the measure living area. Differences which are based upon an agent’s
thoughtful judgment reasonably founded on these or other similar guidelines will not
be considered by the Commission to constitute error on the agent’s part. Deviations in
calculated square footage of less than five percent will seldom be cause for concern.”
Comments
The text in the revised version seems to be basically self-explanatory. While
the text in this version provides clarification in the Guidelines regarding the degree
of accuracy expected by the Commission, it does not represent a change in the
Commission’s position on this matter. As was explained during the 1999-2000 Update
Course, the Commission does not expect absolute perfection in deriving square
footage and is unconcerned about very minor, insignificant errors such as those
described in the above-quoted text of the revised Guidelines.

Although the above quoted text indicated that discrepancies in reported square footage
of less than five (5) percent will seldom be cause for concern, it should be mentioned
that there is no fixed margin of acceptable deviation.

Whether a particular discrepancy is considered problematic depends on the

circumstances of the particular case, including the size of the dwelling and complexity
of its design. It is possible that a discrepancy greater than five percent might be
acceptable for some dwellings, especially those that are quite large and also have
unusual and complex design features. On the other hand, a discrepancy of more
than five percent might be considered problematic for a very small house (e.g., one
with 1,000 square feet) that has a simple rectangular box design with no features to
complicate the measurement. As is clearly implied by the quoted text, the Commission
will apply a common sense “reasonableness” standard when considering complaints
32 Measuring Square Footage
involving errors in reported square footage.
AGENTS’ RESPONSIBILITY TO PERSONALLY MEASURE AND DERIVE SQUARE
FOOTAGE
“As a general rule, the most reliable way for an agent to obtain accurate square
footage data is by personally measuring the dwelling unit and calculating the square
footage. It is especially recommended that listing agents use this approach for
dwellings that are not particularly unusual or complex in their design.”
Text
The above provision reflects a significant clarification in the Guidelines regarding
the responsibility of a listing agent with regard to square footage that is to be reported.
The previous version of the Guidelines indicated flatly: “When reporting square
footage, listing agents are expected to personally measure the properties they list and
accurately calculate their square footage, listing agents are expected to personally
measure the properties they list and accurately calculate their square footage.”
Because the Commission’s revised Guidelines grant agents more flexibility to rely on
square footage determined by certain other qualified professionals (a point that will be
discussed subsequently), the statement indicating that a listing agent is expected to
personally measure and calculate square footage has been replaced by statements
indicating that personal measurement and calculation is generally the best way for any
agent to assure that reported data is accurate and that it is especially recommended
that listing agents use this approach for dwellings that are not particularly unusual
or complex in design. This point will be better understood following the subsequent
discussions of reliance on square footage reported by other persons.

The Commission still strongly recommends that listing agents personally measure the
dwellings they list and calculate their square footage if square footage is to be reported.
RELIANCE ON SQUARE FOOTAGE REPORTED BY OTHER PERSONS-GENERAL
STANDARD
Text
“As an alternative to personally measuring a dwelling and calculating its square
footage, an agent may rely on the square footage reported by other persons when it is
reasonable under the circumstances to do so.”
Comments
It is the above-quoted sentence from the revised section on “Agent’
Responsibility” that reflects the most significant change from the previous version.

Under the OLD Guidelines

The previous version of the Guidelines indicated that inexperienced agents “…
should seek assistance from their broker-in-charge or more experienced agents…”

Measuring Square Footage 33

and that “Where a complex, odd-shaped dwelling is involved which presents measuring
problems not contemplated by these Guidelines, even experienced agents should seek
the help of a State-licensed or State-certified appraiser or an experienced engineer
or architect to assist them in solving the problem(s).” When considered in conjunction
with the provision in the former Guidelines requiring listing agents to personally
measure most houses they list and calculate their square footage, these provisions in
the former version of the Guidelines made it appear that an agent could rely on
square footage determined by other qualified persons only when the agent was
inexperienced or was dealing with a property of complex design.
Under the NEW Guidelines
The new version of the Guidelines reflects an easing of the Commission’s
previous statement regarding reliance by an agent on square footage reported by other
persons. This is particularly true with regard to a listing agent’s responsibilities,
since under the old guidelines, listing agents were expected to personally measure most
dwellings they list and to calculate their square footage.
The text of the revised Guidelines cited above sets forth the general standard
that an agent may rely on the square footage reported by other persons when it is
reasonable under the circumstances to do so.
To assist the reader in better understanding the general standard, the remainder
of the paragraph in the Guidelines that includes the above-cited text, as well as the two
paragraphs that follow in the Guidelines, all provide examples of circumstances under
which it would be reasonable or not reasonable to rely on square footage reported by
other persons. These examples are discussed further below.

RELIANCE ON LISTING AGENT’S REPORTED SQUARE FOOTAGE BY AGENTS

WORKING WITH A BUYER
Text
“Generally speaking, an agent working with a buyer (either as a buyer’s agent or as a
seller’s agent) may rely on the listing agent’s square footage representations except
in those unusual instances when there is an error in the reported square footage that
should be obvious to a reasonably prudent agent. For example, a buyer’s agent would
not be expected to notice that a house advertised as containing 2200 square feet of
living area in fact contained only 2000 square feet. On the other hand, that same agent,
under most circumstances, would be expected to realize that a house described as
containing 3200 square feet really contained only 2300 square feet of living area. If
there is such a “red flag” regarding the reported square footage, the agent working with
the buyer should promptly point out the suspected error to the buyer and the listing
agent. The listing agent should then verify the square footage and correct any error in
the information reported.”

34 Measuring Square Footage

 Comment
This is the first example cited in the Guidelines of when it is reasonable for an
agent to rely on square footage determined by another person.

It addresses the point that an agent working with a buyer may normally rely on
the square footage reported by the listing agent in the absence of circumstances that
should serve as a “red-flag” to a reasonably prudent agent. The specific language
of the above-quoted text is different from the language in the previous version of the
Guidelines and examples have been added, but the point of the provision is exactly the
same as under the previous version of the Guidelines: In a vast majority of cases, it is
reasonable for an agent working with a buyer to rely on the square footage reported by
the listing agent.
The new version also deletes language that stated a buyer’s agent must
independently measure and calculate the square footage when (1) there is a “red flag”
situation, (2) the listing agent verifies the reported square footage or provides
corrected information, and (3) the buyer continues to have an interest in the property.
The Commission determined that, for purposes of the Real Estate License Law, it is
generally reasonable for either a seller’s subagent working with a buyer or buyer’s agent
to be able to rely on verified or corrected information provided by a listing agent without
having to personally measure the dwelling and calculate the square footage.
This is not to say that there won’t still be circumstances where a buyer’s agent or,
for that matter, even a seller’s subagent working with a buyer, may have a duty to verify
reported square footage personally or through another qualified professional other than
the listing agent. For example, suppose an agent working with a buyer suspects, with
good reason, that the reported square footage is in error, but the listing agent insists it
is correct and refuses to make any effort to further verify the data that is suspected to
be incorrect. In such case, the agent working with the buyer should either personally
measure and calculate the square footage or take other reasonable steps to verify the
accuracy of the square footage if the buyer has further interest in the property.
Other circumstances where it is reasonable for agents to rely on square footage
reported by other persons are discussed below.
RELIANCE ON SQUARE FOOTAGE REPORTED BY OTHER QUALIFIED
PROFESSIONALS
Text
“It is also appropriate for an agent to rely upon measurements and calculations
performed by other professionals with greater expertise determining square footage.
A new agent who may be unsure of his or her own calculations should seek guidance
from a more experienced agent. As the new agent gains experience and confidence, he
or she will become less reliant on the assistance of others. In order to ensure accuracy

Measuring Square Footage 35

of the square footage they report, even experienced agents may wish to rely upon a
competent state-licensed or state-certified appraiser or another agent with greater
expertise in determining square footage. For example, an agent might be confronted
with an unusual measurement problem or a dwelling of complex design. The house
described in Figure 8 in these Guidelines is such a property. When an agent relies
upon measurements and calculations personally performed by a competent appraiser
or a more expert agent, the appraiser or agent must use these Guidelines or other
comparable
standards and the square footage reported must be specifically determined in
connection with the current transaction. An agent who relies on another’s
measurement would still be expected to recognize an obvious error in the reported
square footage and to alert any interested parties.”
Comments
This paragraph is intended to provide examples of some situations when it would be
reasonable to rely on the square footage determined by someone other than the listing
agent.
RELIANCE ON SQUARE FOOTAGE DETERMINED BY PERSONS OTHER THAN
THE LISTING AGENT.
From a reading of the above-quoted text, one can see that it is probably
reasonable to rely on square footage determined by persons other than the listing
agent if:
• The other person determining the square footage possesses special expertise
in measuring residential properties and calculating their square footage.
• The other person utilizes the Commission’s Residential Square Footage
Guidelines (or other comparable standards) in determining and reporting the
square footage.
• The determination of square footage made by the other person is made in
connection with the current transaction.
• The other person with special expertise personally measured the property and
made the calculations.
Note that reliance on the square footage reported by other qualified professionals
is no longer limited to situations where the agent is inexperienced or the dwelling
is of complex design, although these continue to be circumstances which would
tend to justify seeking assistance from another qualified person. Agents may rely
on the square footage reported by other persons in any transaction so long as the
conditions described above are met, nor do these listed conditions describe all of the
possible circumstances which might reasonably justify reliance upon another person’s
measurement.
Relying on Appraisers
The Guidelines specifically provide the example of relying on a competent state-
36 Measuring Square Footage
certified or state licensed-appraiser. A state-certified or state-licensed appraiser
may generally be assumed to be “competent” unless the agent is aware of
some information that would make a reasonably prudent agent suspect that the
appraiser is not competent to determine the square footage. To rely on the square
footage determination of an appraiser, the following conditions must be met:
(1) The appraiser must use these Guidelines (or comparable guidelines) to determine
and report the square footage.
(2) The determination must be made in connection with the current transaction. Thus
as will be noted again later in the Guidelines, square footage determined by an
appraiser in connections with an appraisal performed in connection with a previous
transaction generally may not be relied upon.
(3) The appraiser must have personally determined the square footage. If the square
footage was not personally determined by the appraiser reporting the square
footage (or by another competent appraiser acting for the appraiser reporting the
square footage), the square footage may not be relied upon. (Note that square
footage determined for a state-certified or state-licensed appraiser by an appraiser
trainee, which is a fairly common practice in the appraisal industry, generally
may not be relied upon without verification. A real estate agent generally should
possess expertise in determining square footage that is comparable or superior to
that of an appraiser trainee. If, for example, a listing agent is considering reliance
on square footage reported in an appraisal performed for the property owner, the
listing agent should first verify from the appraiser that he/she , or another certified
or licensed appaiser, personally “pulled the tape” and calculated the square
footage.)
Relying on Another Real Estate Agent
The Guidelines also cite the example of relying on square footage determined by
another real estate agent with greater expertise. Actually, it is not always reasonable to
rely on another agent who has greater expertise in determining square footage, and it
is not always necessary that the other agent have greater expertise-it depends on the
actual level of expertise possessed by the agent who will be determining the square
footage.
Example 1: An agent with one month of experience generally would not be justified
in relying on square footage determined by an agent with two months of experience.
Although the agent with two months of experience may have slightly greater expertise
than the agent with one month of experience, the more experienced agent would
almost certainly be considered as not possessing sufficient special expertise to justify
reliance on his/her determination by the less experienced agent. The inexperienced
agent who wants to engage the services of
another agent to determine square footage would need to identify and employ the
services of an agent who possess special expertise in this area. One must look at an
Measuring Square Footage 37
agent’s overall qualifications and reputation when determining whether it is appropriate
to rely on square footage determined by that agent. It is not sufficient to look only at an
agent’s years of experience.
Example 2: An agent with 15 years experience in residential sales is perfectly
competent to personally determine the square footage of most dwellings. However,
the agent engages the services of a licensed assistant in his brokerage activities and
wants to be able rely on square footage determined by the licensed assistant. The
licensed assistant had two years of residential sales experience prior to affiliating with
the agent. Over a period of several months, the agent spends a substantial amount
of time training the assistant on how to measure and calculate the square footage of
many dwellings with a wide variety of design features. The assistant has measured
many properties and has become quite proficient. The Commission’s Guidelines
are used as the basis for such training. The agent is satisfied that the licensed
assistant now possesses special expertise in determining the square footage. In
such circumstances, the agent is probably justified in relying on the square footage
determined by his licensed assistant even though the assistant has substantially less
experience, and perhaps less expertise in determining square footage, than does the
agent.
When relying on square footage determined by another real estate agent, the same
three conditions as are listed above for relying on appraisers must be satisfied.

Relying on Other Professionals

It is possible that another professional other than real estate agent or appraiser
could be relied on under the Guidelines even though no such additional professionals
are specified in the Guidelines. If any such other professional were to be used,
however, the agent relying on square footage determined by such person would bear
the burden of showing the person actually possesses the necessary expertise AND
that the same three conditions as are listed above for relying on appraisers have been
satisfied.
ADDITIONAL LIMITATION ON RELIANCE ON SQUARE FOOTAGE DETERMINED
BY OTHER PROFESSIONALS
An agent who properly relies on a qualified professional to determined square
footage in accordance with these Guidelines is not relieved of all responsibility for the
accuracy of the reported data in every case. The agent is still expected to recognize an
obvious error in the reported square footage and to alert
any interested parties. The reliance by an agent on the qualified professional’s
square footage determined must always be reasonable. An agent may not engage
a third party to determined square footage and then simply turn a blind eye to what
is an obvious error in the resulting area measurement or the means by which it was
obtained.

38 Measuring Square Footage

ADDITIONAL EXAMPLES REGARDING RELIANCE ON SQUARE FOOTAGE
DETERMINATIONS OF OTHER PERSONS
Text
“In areas where the prevailing practice is to report square footage in the advertising
and marketing of homes, agents whose policy is not to calculate and report square
footage must disclose this fact to prospective buyer and seller clients before entering
into agency agreements with them.”
Comments
This provision was also included in the previous version of the Guidelines.
Agents are not required by the Real Estate License Law or Commission Rule to report
the square footage of properties offered for sale or rent. However, the practice is
so commonplace that real estate consumers may reasonably expect that an agent,
especially a listing agent, will do this. The failure to provide some prospective buyers
or renters with the square footage of a listed property may very well adversely affect
the marketability of that property and may impair a prospective buyer’s or renter’s
ability to make an informed decision to buy or rent. Therefore, these Guidelines contain
the above-quoted instruction in order to assure that prospective clients are aware
in advance of entering into an agency agreement of the agent’s policy to not report
square footage.

Measuring Square Footage 39