What to do if there is a dispute over square footage?

QUESTION: I recently listed a home where I measured the square footage and included that number in the MLS. When the buyer’s appraisal came back, the appraiser reported a smaller square footage. The buyer’s agent is now accusing me of making a misrepresentation and is demanding the purchase price be reduced. What am I supposed to do to address this discrepancy, and does a seller have to reduce the price?

ANSWER: No, a seller is not required to reduce the purchase price just because there may be a difference between the square footage reported by a broker and an appraiser. In fact, a discrepancy does not automatically mean that either professional made a mistake. The North Carolina Real Estate Commission’s Residential Square Footage Guidelines found here explain how brokers should measure residential property and what areas may be counted as living area.

Under the Commission’s Guidelines, square footage is generally determined by measuring the exterior dimensions of the home and calculating the area of each level that qualifies as living area. The Guidelines also address factors such as ceiling height, presence of permanent heating system, and whether an area has direct access to the main living area. These rules can affect whether spaces like finished basements, bonus rooms, or rooms over garages may be counted in the total heated square footage.

Although the Commission does not require brokers to advertise square footage, many MLS systems require that a square footage figure be entered when creating a listing. When brokers provide that information, brokers should not rely on tax records as the source of square footage for advertising purposes. However, if a broker’s own measurement differs substantially from the square footage shown in the tax records, that discrepancy could be a signal that past additions or alterations were made without permits or were not properly recorded. If so, a broker should investigate further before advertising the property.

A common source of discrepancies is that appraisers may measure and categorize space differently. For many residential appraisal assignments, appraisers must follow the ANSI measurement standard, particularly for loans sold to Fannie Mae. That standard separates above-grade and below-grade space and may exclude areas that a broker counted as living area. As a result, it is not unusual for appraisal square footage to differ from MLS data, tax records, or a broker’s earlier measurement.

When this happens, the first step is to speak with the appraiser to understand how the property was measured and where the difference originated. Often, the discrepancy can be traced to a particular space, like a finished basement, ceiling height limitation, or room with limited access, which may be treated differently under the applicable standards.

After that discussion, the broker should return to the property and verify the measurements to determine whether the difference is simply the result of different measurement methods or whether a mistake was made. If the broker determines that the listing square footage was incorrect, the broker should promptly correct any inaccurate advertising and discuss the issue with the seller.

If the square-footage difference materially affects the transaction, the parties may choose to negotiate a resolution, such as amending the purchase price, if both sides are willing. If the issue cannot be resolved through discussion with the appraiser or negotiation between the parties, brokers should recommend that their clients consult with an attorney. Remember, a broker’s role is to identify the source of the discrepancy, correct any inaccurate information, and help the parties understand their options.

Release Date: 3/12/2026

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