I spent some time this weekend reading through the North Carolina Real Estate Commission's November disciplinary actions, and unfortunately, square footage showed up quite a bit.
Since we've been talking so much lately about the updated Guidelines, I thought it would be helpful to share the related cases and a few things that stood out to me.
I've removed the names below. You can read the Commission's full disciplinary actions here.
CASE 1: 1,370 SF advertised vs. approximately 895 SF actual
The Commission found that a property was listed and advertised as having 1,370 square feet of heated living area when the actual heated living area was approximately 895 square feet.
After the discrepancy was discovered, the MLS listing was corrected to approximately 895 square feet, but the buyer's agent was not separately notified of the correction in a timely manner.
My observation:
What stands out to me here is that simply correcting the MLS was not enough.
Once a significant square-footage error was discovered, the correction also needed to be communicated appropriately to the other side of the transaction.
That is an important reminder that fixing the number in the listing does not necessarily complete the agent's responsibility once a material discrepancy has been discovered.
CASE 2: Approximately 756 SF above the garage improperly included
The Commission found that an agent advertised a property as having 2,538 square feet of heated living area.
That total included approximately 756 square feet of unpermitted space in an apartment above the garage that was not directly accessible from the main living area.
My observation:
This is a great example of why square footage is not just about measuring dimensions.
A space can be finished and used as living space and still fail the requirements for Living Area because of how it is accessed.
Direct access matters.
Under the NCREC Residential Square Footage Guidelines, Living Area must meet the applicable requirements for heat, finish, and direct accessibility from other Living Area.
This is exactly the type of situation where simply looking at a floor plan or a total square-footage number does not tell the whole story.
CASE 3: Third-party measurement approximately 11% too high
The Commission found that an agent hired a third-party vendor to measure a property.
The vendor was neither a licensed broker nor an appraiser and reported 4,262 heated square feet, but provided no calculation worksheet or dimensions sheet.
The agent relied on that number even though six previous listings were available for review and indicated that the vendor's measurement was approximately 11% overstated.
The buyer discovered the discrepancy after closing when another agent measured the property.
My observation:
Reading between the lines, my assumption is that this may have been done by a photographer or other service provider using some type of phone-scanning technology without actually applying the NCREC Guidelines to the measurement.
That is only my assumption. The Commission does not identify the vendor as a photographer or say what measurement technology was used.
What the Commission does specifically point out is that the person performing the measurement was neither a licensed broker nor an appraiser.
That does not mean a person has to hold one of those licenses simply to measure a house, but I do think it highlights the bigger issue:
Who is actually making the Living Area decisions, and do they understand the NCREC Guidelines well enough to make them correctly?
A person can be perfectly capable of operating a laser, camera, phone scan, or other measurement tool and still not understand which spaces qualify as Living Area.
The measurement tool is not the standard.
In this case, there was also no supporting worksheet or dimensions sheet, and the agent had prior information available that should have raised a red flag.
This is why I think agents should know who measured the property, what standard or method they used, who actually made the Living Area classification decisions, and what documentation supports the final number.
Hiring someone else to measure does not eliminate the listing agent's responsibility for the square footage being advertised.
CASE 4: Converted garage-type area included in heated square footage
The Commission found that an agent advertised a property as having 4,815 heated square feet and included an area that had a garage door and concrete flooring.
The area also had floor-to-ceiling windows, was accessible from the living area, was heated, and was being used as living space.
A county building inspector later confirmed that the area had been properly permitted when it was enclosed.
The issue was that the agent failed to confirm whether the area could properly be counted as heated square footage before advertising it.
My observation:
I think this case is especially interesting because the Commission does not appear to be saying that the space definitely could not qualify.
The problem was the lack of verification.
When a space is unusual, converted, or borderline, that is exactly when we need to slow down, investigate it, and document why it is or is not being included.
A garage door, concrete floor, unusual access, questionable permit history, or other atypical condition should be a signal to investigate further before simply including the area in Living Area.
WHAT I TAKE AWAY FROM THESE CASES
One thing I've said repeatedly in our recent classes is that most serious square-footage problems are not caused by someone being off by a few inches.
They happen when the wrong space gets counted, when an unusual area is not investigated, when a questionable number is accepted without supporting documentation, or when an error is discovered and not handled properly.
The updated Guidelines reinforce several questions that I think every listing agent should be asking:
Who measured the property?
What standard or method was used?
Who determined which spaces qualify as Living Area?
What documentation supports the number?
Are there any unusual or borderline areas that need additional investigation?
Square footage is not just about getting the dimensions right.
It is about making sure the right spaces are being counted.
If you're relying on someone else to provide the square footage, make sure you're not just receiving a number. Make sure you understand how that number was determined and that there is documentation to support it.
You can review the North Carolina Real Estate Commission's full November disciplinary actions here:
https://bulletins.ncrec.gov/disciplinary-actions-100/
Matt Harmon
Harmon Property Solutions