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I had an appraisal done on my home when I purchased it.  Now I am trying to sell it and a potential buyer questioned the appraisal as compared to the tax records square footage.  I argued, showing the appraisal.  He had it measured from the outside and called the appraisal company.  They admitted that the were wrong and also mentioned that their insurance company would not be happy.  Do I have a case against the appraisal company for what I will be losing on the square footage price.  The house was put on the market back in June of 2007 and would have sold very quickly had it been priced correctly.   The market went down and we had to lower the price because of the wrong appraisal. 

The first issue would be whether or not the error regarding the square footage of the home caused you to pay more for home than the actual value - in other words did you rely on the appraisal at the time of purchase and it resulted in you paying too much.  With regard to the subsequent sale of your home, there would be an issue of whether or not you can establish that you suffered damages (lost money).

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When we purchased the house, we made an offer based the asking price.  They were asking $189,000 and we offered $175,000.  The appraisal was done and it was appraised for $180,000.  (Enough for the bank to make the loan).  We put the house on the market back in June of 2007, and the average square footage price in that area was $150 per sq ft. Our realtor did all the homework to advise us on the asking price.  We put the house on the market for $328,000.  Or first offer was for $285,000.  and our realtor advised us not to accept.  Then the person who made the inquiries about the sqare footage made an offer.  At that time we lowered the price to offset the price difference because of the square footage. We went back and forth and the offer was not accepted.  The market declined and we had to keep lowering the price to try to sell it.  Now we are almost a year later and have paid approximately $45,000 in mortgage payments and upkeeps (lawn, pool, power etc).  We lowered the price over time to $289,900.  We just had an offer of $284,900 and we are just ready to be done with it.  So we accepted the offer.  We have definitely lost money on this. 

Explanation:  2194 x 150 sq ft = $329,100   2194 x 141 sq ft = $309,354  (appraisal sq ft)

                     2044 x 150 sq ft = $306,600  2044 x 141 sq ft = $288,204  (actual sq ft)

If we would have known about this, the house would have been priced correctly and it probably would have sold very quickly and we would have saved $45,000.  The difference based on square footage is a loss of $21,150.

Thank you for your response.