As much as we'd like to find a fixed standard in measuring home or building square footage, so far we haven't seen one emerge in the real estate industry. Zillow's discussion (if your receive an error message, instruct your computer to open link in a new window) on this is fairly reasonable.

The way I measure and was taught to measure when I appraised real estate back in the 70's for FHA and Savings and Loans, was to measure the outside foot print of the structure, not including the garage.

When I list a property I have several choices built in to my listing software and mls. (A) I can measure the property myself, (B) I can use the Tax Assessor's statement of square footage, (C) I can use the Architect's statement off the building plans. 

Each of these techniques has its own set of built in errors. (A) It's easy to be off 2 or 3 inches a side over a 50 foot run creating a 150 sq.ft. error on 2500 sq. ft. of home. (B) Tax Assessor records are often in error, (C) If the plans are not a certified set of "AS-Built" set of plans, how does one know if they are accurate?

Many Realtors choose not to measure square footage for several reasons, the most important reason being we pass coded signals to other agents on the floor plan in tract built neighborhoods. In my home town we know, for example that Sunset Development used to advertize their Redwood Plan had 2405 sq.ft.  So when we saw a listing that had 2405 sq.ft. in the Sunset Development area we knew it was the Redwood Plan. We didn't care if it had 2400 or 2450 sq.ft.; the important aspect was to transfer the coded information to other agents that the home was a Redwood Plan. This enabled a quicker more reliable data base to develop for comparable sales research. We could gather up all the Redwood Plan models quickly for sale price commparison and then try and bracket the amenities of the home we where looking at for comparison.

What's a material error then? What's an error so large the buyer becomes damaged or could have been damaged? I'm not certain about the answer to that. It's a legalistic moot point. Since most home sizes fall within 1% of accuracy, probably the limit is somewhere beyond 1% and less than 5%. Greater than 5% error seems too sloppy. Less than that seems like a gray area, 2% seems understandably acceptable given the physical limitations of stretching a measuring tape around bushes, fireplaces, and obstacles. Measuring tapes stretch. Metal tapes stretch on hot days especially, not much, but enough to throw off a complicated measurement around a complex large object. A snug pull on a cloth measuring tape has a big effect in the order of magnitude of "inches." Gravity warps the tape downward noticeably over 50 to 100 foot run. The appraiser pulls hard to make the tape approach level, perhaps not realizing how much the pull stretches the tape. There may be over 50 pounds of pull on the cloth line; I'm guessing I've pulled lines as hard as 100 pounds of pull trying to make the line appear level and snugg to the structure. I do not have a resourse that tells me how to offset correctional pulls on a cloth line. Almost all appraisers use a cloth or coated fabric line. I've never seen one appraiser in thousands of appraisals make a correction for the pulling stretch. So everyting in the industry becomes approximate.

I just like to tell my clients how I determined square footages somewhere in the transaction, preferrably on the listing data itself.

Usually if you tell someone the limitations of your abilitiy to be accurate, they accept it as forthcoming and reasonable. When the actual square footage seems greatly different than the county assessor's records, the property owner and/or the buyer should ask themselves how and why this difference exists and set about to correct it or cancel the transaction. Certainly some sort of written discussion signed by buyer and seller would be in order for everyone's protection.  Big differences cause appraisers to demand evidence the square footage is "legal," meaning it is permitted work accepted by the controlling agencies as such.  I've seen honest mistakes as large as 30%+-, where the controlling agency showed an anchient square footage number of only 2/3rds the actual size that existed. The controlling agency issued all the building permits for expansion, and finaled the inspection on the completed construction and the additional area was missed by the tax assessor's office. 

Most Industrial and commercial brokers I know never actually measure the buildings they are dealing on. The idea is based on the level of sophistication required to buy or lease such a property. The transfer of due-diligence is customarily transferred to the buyer/tenant who is felt to be financially able to surround themselves with third party outside experts to advise them. 

I measure the buildings I list and disclosre what I find somewhere in the transaction. If it's a big difference I disclose it up front. If it's less than 5% difference from the county assessor, I release it as part of my duty to pass along what I know in the normal flow of business as I do not consider it a deal breaker bit of information. But I do release it and get it signed off along the normal flow of business. On property I show and lease that I do not have listed, I go with what the listing agent provides because I know the agent has gone through the same/similar line reasoning I go through and doesn't want there to be any misunderstanding. On tract homes where it may have sold more than once without remodeling, or reflects floor plans repeated often in the tract, I simply go with the assessor's office as it is 99% or better to be reliable within 1% of error.

What about these aspects: (a) Stair Wells (b) Out houses (c) Detached Rooms (d) Remodeled garages made into living areas (e) Connecting breezeways (f) Basements fixed up nice, (g) Part residence part commercial (h) Fancy cabana rooms with interior stair access to the roof next to the sun deck or in the back yard next to the swimming pool (i) Or that Bar-B-Que in the yard that became a shade cover, that was plumbed-out and electrically wired, and eventually enclosed? Hm-m-m. (j) My favorite.....the "finished attic -- with permits." I'll write more on these elements later when time allows...soon.