unintentional error in square footage on listing agreement was discovered by appraisal. Buyer wants reduced price and threatens legal action . Seller wants deal to close as contracted. Who is right? In Arkansas.
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unintentional error in square footage on listing agreement was discovered by appraisal. Buyer wants reduced price and threatens legal action . Seller wants deal to close as contracted. Who is right? In Arkansas.
House was listed at 4300 sq. ft on MLS listing based on owner’s belief that this was accurate. The house measured at 3960 at appraisal. Buyer is wanting price concession and threatening legal action should seller not negotiate.
Question. Can Seller be forced to make concession in price? If not, can buyer be forced to complete the sales contract for contracted sales price despite the error on the MLS listing.
Asked on April 12, 2016 under Real Estate Law, Arkansas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
The owner's belief is, in this regard, irrelevant. A 340 sq. different is considerable: that is equal to around 7% of the listed square footage, or equal to the size of 1 - 2 rooms (e.g. a 12 x 15' bedroom is 180 sq. feet). That is a large enough discrepancy that it could easily be considered a material, or significant, breach of contract: the seller is not selling what he/she was contracted to sell, but is instead selling a smaller home.
A discrepancy that large could give the buyer grounds to treat the contract as terminated due to the breach; alteranatively, if the buyer sued, he/she might be able to get compensation equivalent to a price reduction for the smaller size.
It's not certain that the buyer would win: it's possible that a judge could feel that regardless of the MLS listing, if the buyer saw the house before putting in an offer, the buyer purchased the home based on what he/she observed with his/her own eyes and therefore the listing is irrelevant. In that case, there would be no consequence to the seller and no relief to the buyer. Judges are human beings, and can vary in how they view situations: some might find for the buyer, some for the seller. But there is a reasonable, albeit not certain, chance the buyer could prevail. It is most likely in both parties' interest to negotiate to an outcome--some compromise--they both could live with.
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