Too Good To Be True

4,000 FSF by Cedar Lake for $380k? Not So Fast

Even in a soft market, the brand new listing -- first on MLS this Thursday -- jumped out: a 1930's Cape Cod with over 3,900 finished square feet ("FSF"), less than a mile from Cedar Lake and Lake Calhoun, for $380k -- with great curb appeal to boot!

Even if the house were a fixer or in foreclosure, the price would be attention-getting. However, according to the listing agent's remarks on MLS, the "home shows beautifully . . . nooks, crannies, wdwk, charm, fully updated decor & mechanicals. Dreamy cottage exterior welcomes you home to spacious floor plan."

With clients interested in the neighborhood, I raced over to take a look. The catch? I'd estimate the FSF at closer to 2,100 FSF -- little more than half what the agent claimed.

So what's going on? Without knowing the agent, it's hard to tell. It could be an honest mistake by a newbie realtor. Or, it's always possible that the agent, eager to generate traffic, knowingly told a whopper.

If that's the case, they're almost certainly doing their client a disservice, for two reasons.

First, homes have the best chance of selling when they pack lots of (positive) surprises, exceeding Buyers' expectations. Conversely, homes that overpromise invariably leave prospective Buyers feeling disappointed (if not misled), and eager to move on.

Second, Buyers are naturally reluctant to buy homes from Sellers they don't trust. Grossly exaggerating the square footage creates an equally big credibility problem. Square feet* is easy to verify, but what about less obvious home features? Is the basement really dry? The roof leaky? The foundation intact?

Minnesota law requires Sellers (and their realtors) to disclose what they know about their home. And every scrupulous Buyer will likely do their own inspection. But the truth is, no one knows a home better than the Seller living in it. Unfortunately, if they withhold something crucial, the Buyer may not know until after they own it.

In a Buyer's market with lots of inventory, most sensible shoppers will simply move on rather than take that chance.

*Can a Seller who overstates their home's square footage be sued? Probably not. The reason is that the Buyer would have to prove not just the misrepresentation, but that they relied on it. That argument becomes increasingly tenuous once the Buyer has viewed the home several times, then spent several more hours inspecting it. However, if you find yourself in this situation . . . talk to a practicing attorney (I'm not anymore).