Determining the living area of a home can be somewhat challenging in real estate. Currently, there is not one nationally-recognized standard for measurement that every appraiser must follow. This can create challenges when measuring a home to list for sale, or when measuring for the appraisal after the home has a contract on it. While there is not a single set of rules that every appraiser must follow, one standard that is widely known and used is the American National Standard Institute (ANSI). Additionally, Fannie Mae and FHA each have specific guidelines that appraisers are required to follow for loans that go through those agencies.
While there is no one standard that appraisers must follow when it comes to measuring single-family homes, there is one standard that is well know; the American National Institute (ANSI).
has several guidelines for what is considered living area and what is not. One area that these guidelines cover is
ceiling height, which often creates confusion when it comes to calculating
gross living area. ANSI says that any
part of a room that has less than 5 feet from the floor to the ceiling is NOT
included in the living area. It also
says that for a room to be included in the gross living area, at least half of
the space in the room must have a ceiling height of at least 7 feet. This is important when measuring homes that have
a second or third level. There are
instances where the ceiling can be sloped in some areas with a height of less
than 5 feet. It is important that the
correct measurements are taken so that an accurate gross living area can be
calculated. Ceiling height can also be
an issue in A-frame houses. Since the
exterior walls have a slope all the way (or almost all the way) to the ground
level, appraisers must be careful when measuring A-frame homes.
following is an illustration from the ANSI standards to help clarify which
areas can be included in the GLA. (Figure 4 from The American National Standard
For Single-Family Residential Buildings)
Another area that ANSI guidelines covers is the
stairway. ANSI says that, “the area of
both stair treads and landings proceeding to the floor below is included in the
finished area of the floor from which the stairs descend, not to exceed the
area of the opening in the floor.” This
means that if you have a home with a second level, the stairs are included in
the gross living area of the second floor as long as the area of the stairs does
not exceed the opening above. ANSI also
goes on to say that, “areas beneath stairs are included in the finished square
footage regardless of the distance between the stairs and the floor below or of the degree of finish of that
area.” Although the area beneath the
stairs may be less than five feet, ANSI says that it is included in the square
footage of the space below the stairs.
a loan is insured by FHA, appraisers must comply with their standards. One of these standards specifies how living
area is measured. According to the FHA
guidelines, the gross living area (GLA) is defined as “the total area of finished,
above-grade residential space calculated by measuring the outside perimeter of
the structure. It includes only finished, habitable, above-grade living
space.” FHA also says that the appraiser
identify non-contiguous living area and analyze its
effect on functional utility;
ensure that finished basements and unfinished attic areas
are not included in the total GLA; and
use the same measurement techniques for the subject and
comparable sales, and report the building dimensions in a consistent manner.
to FHA, it is important that only above-grade finished areas are included in
the GLA. Also, finished areas not
accessible directly from the main dwelling are not to be included in the GLA;
i.e., a bonus room above the garage that can only be accessed through the garage. While basements are not typically part of
homes in South Louisiana, it is important for appraisers in other areas of the
country to be aware of this guideline.
also talks about “Additions and Converted Spaces.” For additions or converted space to be
considered living area, it must be:
accessible from the interior of the main dwelling in a
has a permanent and sufficient heat source; and
was built in keeping with the design, appeal, and quality
of construction of the main dwelling.
is important that the addition or conversion meet all three requirements. If any one requirement is missing, then it is
not considered part of the living area.
For example, an attic above a garage that is finished as the rest of the
dwelling is not part of the gross living area if you must walk through the
garage to access the conversion. For
these such additions or conversions that do not meet the criteria, the
appraiser must analyze the effects of the area and account for it in the
Mae also has their own guidelines on what constitutes living area. Their guidelines state that when calculating
living area, appraisers must use exterior building measurements per floor for
above-grade areas. They also state that
living area includes only finished areas that are above grade. Areas that are finished, but not included as
living area, must be considered by the appraiser by analyzing the market to
determine its effect on value.
In addition to these
guidelines, there are many more rules for calculating the living square footage
of residential properties. To get the most
accurate measurement of your home, be sure to contact a qualified appraiser who
is knowledgeable of the rules and guidelines that must be followed. If I can assist you in your measurements, you
can contact me by email at Lduple4@gmail.com
or on my phone at 337.254.2215.
FindMyAppraiser.com is a national source for finding local appraisers. It is a network of trusted, knowledgeable local appraisers, that are dedicated to delivering accurate, quality valuations for your home. Whether you are purchasing a home, refinancing a home, listing your home for sale, or going through a divorse, a local appraiser is an important part of the valuation process.
Local appraisers research, analyse, and report local market conditions, which is an important piece of the appraisal. It is important for consumers to know if property values are increasing, decreasing, or stable. Consumers also need to know if the market is over supplied or under supplied. These findings can help a homeowner decide where they want to list their house at. It could also help a buyer decide on what price that they want to offer on a house.
Duplechin Appraisals, LLC is a proud member of this organization. If we can be of service to you, please do not hesitate to contact us at 337.254.2215 or Lduple4@gmail.com.
I’m sure you’ve heard the question, “What are the first three rules of real estate?” The answer that many real estate professionals will tell you is “Location, Location, Location.” While this may be true, when it comes to valuing your home, appraisers typically use comparable homes with similar locations. When the comparables have similar locations, what else factors in to a home’s value and differentiates the value of one home from the next?
Living square footage:
Several factors come into play when valuing a home. One of the most important features of your home that affects value is the living square footage. Basically, the more living square feet you have, the more your home is worth. There are some instances where a home can be over-built and have too much square footage. However, most of the time, the more square footage you have equals more value.
Renovations and updates:
Another factor that can increase the value of your home is updates. Renovations can improve both the quality of your home and the condition of your home. I have seen investors purchase old, outdated homes and completely renovate them. Originally the homes would have linoleum and carpet flooring, wood paneling walls, formica counters, stock built cabinets, etc. After renovations, the homes have wood and tile flooring, sheetrock walls, granite or quartz counters, custom cabinets, etc. So, the renovations not only improve the condition of the homes (new materials) but the quality of the homes too (higher end finishes).
Other important factors:
Several other factors can affect the value of your homes: lot size, views, bedroom and bathroom counts, covered parking, amenities, etc.
Ultimately, the local market decides what factors influence the value and by how much. It is important to have the assistance of a local real estate professional to analyze the market and to determine which factors are/are not important in your market area. If you are considering buying or selling a home and want a reliable opinion of value, contact me at 337-254-2215.
Lane Duplechin, AGA
Candidate for Designation with the Appraisal Institute
One thing that I hear sellers say often is, the house down the street sold for “X”, therefore the value of my house is worth “X”, or something very close to “X”. While this statement could hold some truth in a newer cookie cutter subdivision, it is almost never true in most other subdivisions. Even in an older cookie cutter subdivision this statement most likely would not be true. The condition of a house has a big affect on the value of a home. Homes suffer different degrees of depreciation based on how a home owner maintains the home and the kind of updates that are made over the years. What if the home down the street has been remodeled? Instead of having the original tile or formica counters and tile and carpet flooring, maybe the owners updated the counters to granite, replaced the original floors with wood and new ceramic tile, and updated the bathrooms. So if your home hasn’t had any updates, then it most likely would not have a similar value to the home down the street, assuming that all other features are the same. Likewise, the house down the street may have been neglected and is in poor condition. Do you still think your property is worth the same as the one down the street? Probably not!
In a more custom built subdivision, your property most likely has other differences from the house down the street. Maybe your living square footage is significantly larger/smaller, the lot sizes could be much different, and/or the quality of your home could be superior/ inferior to the house down the street. Other differences include number of bedrooms and bathrooms, the type of covered parking (carport vs. garage), or the amenities that come with a property (covered patio/porch, fence, storage buildings, workshops, outdoor kitchen, pool, etc.) The living square footage, often referred to as Gross Living Area (GLA), is one of the most important characteristics that affect value. If the house down the street is 500 sf larger then yours, then this property might be worth a lot more than yours. If your property has a much smaller lot size than the property down the street, wouldn’t you think that your property is worth less? All of these property characteristics could play a role in the value of your home. They need to be analyzed by a professional to determine what kind of effect on value they have.
The truth is, is that every property is different and every market is different. If you are thinking of listing your property for sale, it is important that all of the relevant characteristics of your property are analyzed by an expert in your market. A certified appraiser has the training, education, and experience necessary to provide you with an accurate value of your home, which gives you a valuable tool in listing your property and in your negotiating efforts once the property is under contract.
real estate market is constantly changing. There are some sub markets
in the Lafayette area that have declined in the last few years, while
others have remained stable. If you are thinking about listing your
property for sale, it is important to know how your market is
performing to know the true value of your home. You should hire a
qualified real estate appraiser to assist you in determining your home’s
value. I’d be happy to assist you in your valuation needs.