Do brokers tend to exaggerate the size of their Manhattan townhouse listings? That’s the subject the Wall Street Journal has explored in a new feature, following the release of two studies that show the increasing prevalence of this trend in recent years.
At the heart of this problem is the fact that there isn’t any defined law that asks brokers to calculate square footage of a home in a particular way. The WSJ points out that mortgage underwriters and appraisers follow a set method, and leave out the basement and the cellar level from their final measurements.
Brokers on the other hand usually hire floor-plan artists to come up with estimates, according to the paper. The information they provide can certainly be fact checked through tax records or architecture plans, but the WSJ’s research showed that that’s not often been the case.
A prominent example featured in this piece is the Greenwich Village townhouse at 73 Washington Place. While the listing says the house measures 8,643 square feet, a filing with the city puts it at 6,000 square feet.
WSJ’s analysis of StreetEasy data showed inconsistencies when the same house was listed multiples times over the past decade. The square footage on more than half the buildings had changed, and when it did change, it usually increased on average by 987 square feet, according to the paper.
Broker Donna Olshan told the WSJ that she recently compiled a list of all townhouses in Manhattan asking over $6 million (there’s 162 of them), and she found that a staggering 120 of them showed extra square footage on their listing. Even more damning is the fact that 32 of these homes had square footages bigger than property rights for that site allowed.
So why does this happen? The WSJ posits that it’s the rapid rise of prices, and the appeal of showing a lower price per square foot, which adding a basement or cellar into the mix can certainly contribute to. Sometimes it can just be about the amount of work the owner has put into the house: Why not include the basement if you’ve spent millions of dollars spiffing it up? Well, at least now, more buyers will become aware of this practice.