Unpermitted Addition, Easement, and Flood Zone: What Goes in the MLS?
A broker lists a 1968 ranch in a metro Atlanta county. The seller states 2,650 heated square feet; the county tax record shows 2,050. A rear addition was built in 2020 without a permit. The seller's old survey shows the addition extends 4 feet into a 20-foot drainage easement that runs along the rear lot line. The property is in a special flood hazard area; the seller pays $2,900 per year for flood insurance. The broker's CMA, prepared from tax records, values the home at $410,000. The seller wants the MLS to say '2,650 sq ft, no flood issues' and wants the broker to withhold the easement and permit facts because 'the buyer can get their own survey.' A buyer's lender has already ordered an appraisal.
1. How should the broker handle the square footage and the seller's requested MLS language?
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The broker should not enter '2,650 sq ft' as if it were verified. The county record says 2,050, and the seller's number may include the unpermitted addition. The MLS should state the source of the measurement, such as 'tax records' or 'seller,' and should not present an unverified number as fact. The broker also should not advertise 'no flood issues' when the property is in a special flood hazard area and the seller pays flood insurance. If the broker has actual knowledge of the easement, the unpermitted addition, or flood zone, those are material facts that must be disclosed to buyers. A seller's instruction to withhold them does not excuse the licensee.
2. What should the broker tell the seller about the easement, the unpermitted work, and the seller's instruction to withhold them?
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The broker should advise the seller that the easement, unpermitted work, and flood zone are material and that buyers and lenders will discover them. The broker should recommend a new survey and a permit search, and get the seller's written authorization to disclose. If the seller refuses, the broker should not list the property on terms that misrepresent it; the broker may need to terminate the listing. In the MLS and marketing, the broker should use accurate language, attach the flood determination if available, and disclose the source and limits of the square-footage information.
3. How should the broker adjust the valuation and advise the seller about the pending appraisal?
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For valuation, the CMA should not simply adopt the tax record or the seller's figure. The broker should use closed sales with similar heated area, adjust for the unpermitted addition, the easement, and flood insurance cost, and consider functional obsolescence. An appraiser will measure the home and may treat the addition differently if it is not permitted or if it encroaches on the easement. The lender may require an inspection or repair, and the flood zone affects insurance and marketability. The broker should explain to the seller that the $410,000 CMA may be high if it was based on tax records and that the market will discount the property for these issues.