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Caveat Emptor | Buyer Beware

Caveat Emptor | Buyer Beware

As the Government, the media, and the general public continue to grapple with unaffordability in Toronto, all eyes have been trained on the regulation – or at times, lack thereof – on the Real Estate Industry as a whole.

As of late, there has been a lot of attention and new guidelines in the works surrounding Multiple Representation, and for good reason! In my personal and professional opinion, much stricter guidelines are definitely needed for same-broker representation with Buyer and Seller. But as more and more people call for greater transparency in the real estate industry and its practices, one of the anomalies that continue to slip beneath the radar is the reporting guidelines surrounding the square footage of a listed property for Sale, especially in Condominium sales.

Currently, a seller can state an approximate estimate of their property’s square footage (to the best of their knowledge) and that estimate will then translate into a wide-spread range on the MLS listing for potential buyers to review. The trouble here is not only the ambiguous figure that is being used in the marketing materials but more so, the possibility that this range in itself is incorrect – with little to no repercussions to the seller/agent if this is the case.

Essentially, a condo is a housing commodity that is generally priced and traded on a price per square foot basis and is how potential buyers and their Agents will ascertain a properties value – especially in a scenario where a property is set up for multiple offers i.e. listed at a very low price. Why is it that when listing a condo on the Toronto MLS, it is acceptable to list a property for between approximately 500-600 square feet, as an example? Often times many of these properties can be far less than their approximate advertised range and in turn, the purchaser may be completely unaware of the exact size or price per square foot that they are paying. In some instances, due to the lack of guidelines, consumers may intentionally be mislead. While it is the seller and agents responsibility to ensure it is stated that the “measurements are to be verified” this is not always explicitly stated.

Currently, there are no guidelines in place as per The Toronto Real Estate Board to require a seller or their Sales Representative to provide third-party verification of the exact square footage of their listed property. What is even more interesting is that as the sizes get larger for condos listed on the Toronto MLS, as does the range for stating square footage. As an example, anything below 1,000 square feet has a 99 square foot spread (i.e. 400-499 s.f.) while properties listed over 1,000 square feet move into a 200+ s.f.  spread between ranges (i.e. 1,000-1,199 s.f.).

Can you imagine walking into a Developer’s showroom and they are charging $1.4 million for a pre-construction condo that may range between 1,200-1,400 square feet? That would be ridiculous, wouldn’t it? More notably, if you look at Vancouver’s Real Estate Board, they do not utilize the square foot “range” at all and as a result, all of their listings uniformly state an explicit figure. While this figure can still be an estimate from the seller, the measurement is typically accompanied by a note as to whether or not the measurement needs to be verified.

As more and more people search for properties online and call for greater transparency, wouldn’t consumers and the Toronto Real Estate industry be better served by stricter guidelines surrounding the disclosure of the exact size a property for sale? I believe we would all be better served and hope this is something we can start to see in the near future.