Some of the most common questions I get from real estate agents center around home measurement. Do we measure on the interior? What about individual rooms? How are basem*nts or guest houses counted? There is a lot of misunderstanding of the process, and having bad information can cause problems in a real estate sale.
Gross Living Area
The main thing to understand about home measurement is that all appraisers will be using Gross Living Area (gla) for residential properties. Guidelines will be provided by Fannie Mae or similar body, but methodologies for arriving at the figures differ. The primary standard used by most appraisers is the American National Standard for Single Family Residential Buildings, written by the American National Standards Institute, Inc. (ANSI®). ANSI® Z765-2021 (American National Standards Institute®) (get more info here) is now the accepted standard for home measurement.
The ANSI Standard is the accepted method by National Association of Realtors and is an accepted method for most assessor’s offices, HUD, Fannie Mae, Freddie Mac, etc.The ANSI standard bases floor area calculations on the exterior dimensions of the building at each floor level, and include all interior walls and voids. “Finished area” is defined as “an enclosed area in a house suitable for year-round use, embodying walls, floors, and ceilings that are similar to the rest of the house.” Some other notable items about home measurement standards and gla:
guest houses are counted separately and therefore will not appear in the gla
basem*nts are measured and always given value, but again, appear in a different
living areas must be cooled and heated by permanent sources
Fannie Mae Specific Guidelines
Fannie Mae expands on items to consider when measuring a home:
“Gross Living Area
The most common comparison for one-unit properties, including units in PUD, condo, or co-op projects, is above-grade gross living area. The appraiser must be consistent when he or she calculates and reports the finished above-grade room count and the square feet of gross living area that is above-grade. The need for consistency also applies from report to report. For example, when using the same transaction as a comparable sale in multiple reports, the room count and gross living area should not change.
The appraiser should use the exterior building dimensions per floor to calculate the above-grade gross living area of a property.
For units in condo or co-op projects, the appraiser should use interior perimeter unit dimensions to calculate the gross living area.
Garages and basem*nts, including those that are partially above-grade, must not be included in the above-grade room count.
Only finished above-grade areas can be used in calculating and reporting of above-grade room count and square footage for the gross living area. Fannie Mae considers a level to be below-grade if any portion of it is below-grade, regardless of the quality of its finish or the window area of any room. Therefore, a walk-out basem*nt with finished rooms would not be included in the above-grade room count. Rooms that are not included in the above-grade room count may add substantially to the value of a property, particularly when the quality of the finish is high. For that reason, the appraiser should report the basem*nt or other partially below-grade areas separately and make appropriate adjustments for them on the Basem*nt & Finished Rooms Below-Grade line in the Sales Comparison Approach adjustment grid.
For consistency in the sales comparison analysis, the appraiser should compare above-grade areas to above-grade areas and below-grade areas to below-grade areas. The appraiser may need to deviate from this approach if the style of the subject property or any of the comparables does not lend itself to such comparisons. For example, a p
roperty built into the side of a hill where the lower level is significantly out of ground, the interior finish is equal throughout the house, and the flow and function of the layout is accepted by the local market, may require the gross living area to include both levels. However, in such instances, the appraiser must be consistent throughout the appraisal in his or her analysis and explain the reason for the deviation, clearly —describing the comparisons that were made.”
Contact us today with help getting a proper measurement. Doing so will ensure your clients are making an informed decision.
When having the home appraised, the report may actually indicate a lower square footage than the tax assessment. That could be from the appraiser not counting certain areas that the tax information may include.
Depending on where you are buying a home, there are legal definitions around livable space that require spaces like a basem*nt to be finished, heated and ventilated, partially or fully above-ground, and to have an entrance or exit to the outside for safety reasons.
While appraisal fees can vary, a Licensed Residential Appraiser typically charges around $450-$625 for single-family homes under 3,000 square feet in Arizona. But unique properties may require specialty expertise that comes at a higher price.
During the home inspection, the appraiser will measure your home by its outside walls instead of by the interior surfaces. Measurements taken by home appraiser must also comply with ANSI standard. This means that the measurements must be taken to the nearest inch before rounding up to the final square footage.
If the interior hasn't been changed for decades, it may not appeal to buyers, which can also cause the value to decrease. Outdated features like these could also signal that the home has not been taken care of properly and more issues might lie beneath.
Note that it is a buyer's responsibility to verify the square footage of a house before buying. Most states in the USA follow the 'caveat emptor' rule, meaning the buyer must follow due diligence before buying a property.
A certified appraisal costs money because a professional appraiser has to physically take the time to tour the home and do the research to complete a comprehensive report.
Your lender must provide you with a copy of your appraisal and any other written valuation promptly upon its completion or no later than three business days before closing, whichever is earlier. Your lender may provide the appraisal or evaluation to you by mail, electronically (for example, by e-mail), or in person.
3 For off-market homes, it's now 7.9%. 4 Zestimates are only as accurate as the data behind them. So, if the number of a home's bedrooms or bathrooms, its square footage, or its lot size are inaccurate on Zillow, a Zestimate will be inaccurate. Users can correct these mistakes.
If you believe that the public records are inaccurate, you should contact your local assessment department to request that the data be reviewed. The process varies by location; some may ask you to file an appeal or submit a grievance.
Price per square foot is calculated by dividing the sale price by the gross living area. For example, if you have a 1,500 Sq Ft home selling for $225,000, the price per square foot would be $150/Sq Ft. Gross living area as defined in THISprevious post, is the finished above grade living space.
Adjustments are calculated by multiplying an adjustment factor times the quantity difference between the subject and comparable. For example, if the GLA for the subject is 2200 sq ft and for a comparable, 2000 sq ft, the difference, 200 sq ft would be multiplied by the adjustment factor.
4 Zestimates are only as accurate as the data behind them. So, if the number of a home's bedrooms or bathrooms, its square footage, or its lot size are inaccurate on Zillow, a Zestimate will be inaccurate. Users can correct these mistakes.
Introduction: My name is Margart Wisoky, I am a gorgeous, shiny, successful, beautiful, adventurous, excited, pleasant person who loves writing and wants to share my knowledge and understanding with you.
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