Living Area for Single-Family Homes

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).

ANSI

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. 

The 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.

FHA

If 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 must:

  • 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.

According 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. 

FHA 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 functional manner;
  • has a permanent and sufficient heat source; and
  • was built in keeping with the design, appeal, and quality of construction of the main dwelling.

It 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 appraisal.

Fannie Mae

Fannie 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.

What Affects Your Homes Value?

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

Home Values

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 Expert

The 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.

Appraisal Services

Do you have questions about how the Acadiana Market is performing? Do you need to know the value of your property? Contact Duplechin Appraisals, LLC to find out how we can assist you.