Huge discrepancy in square foot of house

[indian73]

Hello,

I am in a situation where I have no clue what my options are.

I bought my first house in Mar 2008. At the time and even today, hcad.org shows the square footage of the house at 3545.

When I bought the house, I used a broker who was a friend's husband, so I trusted him completely. His appraiser came up with 3477 Sq feet of living area, and based on that, the house was appraised at $350K. (I did not see copy of the appraisal at the time), but asked for a copy a couple of months after closing).

I have excellent credit so I decide to re-fi my house with a different broker this time(Much better APR). The new guy uses his trusted appraiser and this appraiser came up with 3224 sq ft.

The new appraisal has come at $321K. The new appraiser says the old appraisal was done incorrrectly and it included a workshop at the other end of the breezeway. Hence the old square footage is wrong. But this appraiser also forgot to mention 1 full bath in my house. The square footage maybe right, but the number of bathrooms mentioned in the appraisal are incorrect.

I am totally devastated to say the least.

I bought the house at the time, and paid for it based on the value that I thought was right for 3545 sq ft (even 3477 is acceptable, though not accurate). However I now feel cheated, because the house is a much smaller square foot than I thought it was.

My dilemma, is can I sue the old appraiser for doing the appraisal wrong and asking for compensation because I paid way more than the house was worth for (at the time)?

Can I get a copy of the original appraisal from HCAD and sue THAT appraiser?

What about refund for the extra taxes I paid based on incorrect square footage?

Thanks in advance.

[rbarz]

Short answers:

Sue old appraiser? No

Sue HCAD appraiser? No

Refund for taxes? Yes

Long Answer:

You can sue anyone you want for pretty much anything, but the real question is if you can recover anything. The problem is that there are NO standard methods for computing square footage, thus it is nearly impossible to show negligence. HCAD likes to add everything into the square footage including porches, roof overhangs, and certainly work shops and enclosed spaces regardless if they are air conditioned or not. Rencently, Banks and their appraisers have become very safe (stingy) and are not counting anything extra in their appraisals. You could have a space in your home that looks perfect, flows from one area to the next, is totally finished just like any other room, but does not have an air conditioning vent in it and the bank will not count it as square footage and will list it on the appraisal as a porch. Also in a declining market most banks have a standard deduction they place on all appraisal values. I have seen 10% to 15% reductions, which is pretty steep for Houston, but the differences in your appraisals is only 8% at a time when the values have fallen since March 2008! The other way you could sue is under the Texas Deceptive Trade Practices Act (DTPA), but your probably going to have to show that your appraiser knowingly and/or willingly tried to screw you, but with only 8% difference in a declining market it is prima facie in the appraiser's favor. Plus, the bathroom that was left off of the $327k appraisal is going to add value to the home further reducing the difference in value.

There is no way you can sue the Harris County Appraisal District and win. You would probably have to petition the county just to get permission to sue.

You can get a refund for the taxes paid. If your house was valued by HCAD at $350k then that could be as much as $665.

[RedScare]

The first thing I would do is get over the devastation, as you probably haven't been devastated nearly as bad as you want to believe. As rbarz correctly stated, everyone uses a different standard when calculating square footage. HCAD measures from outside edge to outside edge. This measurement includes the walls, which are 4 to 6 inches wide, so the measurement will be larger than a measurement that only includes "liveable area" or the inside area of the rooms. This is not a big deal, since HCAD uses this formula for every house it appraises, so every houses is proportionally larger. The way to verify the HCAD number is to simply measure the dimensions of your house and add it up. Open porches are included on the HCAD site, but are NOT include in the square footage for its appraisal.

Since the first appraiser came in at only 68 square feet less than HCAD, I suspect that he did a more accurate calculation that did not include the outside walls. He likely included the workshop, perhaps because it is air conditioned (?), or more likely, to give you a bigger square footage to qualify for the mortgage you were asking for.

The last appraiser is probably being more stingy because those are the rules that the bank told him to work under. Remember, the appraisal is not done for your benefit, but for the lender's. If the lender wants to include workshops in the square footage in qualifying your loan, they will. If they do not want to include un=air conditioned space, they won't. Your home did not shrink, the lender's willingness to gamble did.