Four areas the appraiser will not include in your homes square footage

Four areas the appraiser will not include in your homes square footage

With everything else being the same a home with more square footage will always sell for more. That makes sensewhat areas can I include in appraisal square footage right? When we talk about square footage, keep in mind that we’re talking about heated and cooled living area, commonly known as gross living area (GLA). This can be confusing to some people because they think that if an area is not included in the gross living area then they are not getting value for it in their appraisal, however this is not true. These areas are given value but at a lesser amount than the main living area.

Today I would like to share with you four areas the appraiser will not include in your homes square footage. You will get credit for them but not at the same rate, so lets take a look.

Enclosed porches

The quality of construction for an enclosed porch can vary from the most basic finish to one with similar quality to the rest of the home. Some of the features an appraiser will look for are type of access to the room, type of  heating and cooling, the level of finish compared to the rest of the house and whether the room would be suitable for year-round occupancy. The area will most likely not be included unless it has been built as an extension of the home with a equal finish and comparable heating and cooling source. This typically will not include a window unit air conditioner and it will not give off a porch “feel”.

People will occasionally enclose a porch with the entry into the main area being through an existing exterior door and one of the walls being the exterior siding of the home. While it is possible for them to pull off a good addition, most of the time it doesn’t work and it is still considered an enclosed porch and will not be included in gross living area. Some examples of what works and what doesn’t work is shown in the picture below.

sunroom that can be added to gross living area

sunroom that cannot be included in gross living areaGarage apartments

A common addition to add living area for an in-law or teenager is to finish off the area over a garage. One thing you want to keep in mind is that you may not get full consideration for it unless you provide the right access to it. I’ve seen two ways to do this with the first one providing access by way of another finished area of the house.

Some new homes in my market were built with the option of finishing off the area over the garage when it was needed. The stairway to this area was fully finished, so I guess the builder was pretty confident that owners would do this at some point. The layout typically consisted of a bedroom, closet, and on some an area for a bath. From an appraisers perspective this is the best case scenario because the floor plan is very functional and flows well.

The second type of floor plan I have seen is where you must go out and through the garage to get to the staircase that leads to the room over the garage. I have seen this configuration less frequently but thought I should mention it to make you aware because it is looked at differently and provides less contributory value than the other one. I’ll explain to you below the rule for including this type of area.

Guest houses

In my market I’ve also seen these called carriage houses. They are typically built over a detached garage or storage building, however I have also seen the entire building converted to living area. These usually have more square footage and rooms and can be built to be fully sustainable with a living room, kitchen, bedroom, and bathroom. One good thing about this type of living area is that it can be rented out and has good privacy for the tenant since you don’t have to go through the house to get to it. Again, because it is not part of the main residence it is given less value and is not added into the overall GLA of the home.

Detached “Man Cave”

Most of the man caves I have seen are built in the basement of a home which are given the typical consideration that a basement brings, however on one assignment the owner had a detached building built in the back yard and decked it out with everything you would want. In some respects I guess you could say it was functionally similar to the guest house above, however it was built more for entertainment than a stand alone living area. Quite a bit of money had been invested in this and it was quite impressive but I don’t think that going into the project the owner worried about how much value it would be given in an appraisal or if he ever had to sell it. My main goal today is for the person who wants to add one of these areas to their home to know that it will not be included in the homes total gross living area and will not be given the same value (price per square foot) as the main home.

The ANSI rule for what finished areas can be included

ANSI is a standard by which a single family house can be accurately measured and the results can be reproduced by others. I’m including the sections that pertain to the types of area described above.

Finished areas connected to the house

“Finished areas that are connected to the main body of the house by other finished areas such as hallways or stairways are included in the finished square footage of the floor that is at the same level. Finished areas that are not connected to the house in such a manner cannot be included in the finished square footage of any level.”

The ANSI commentary for this is as follows:

“Finished areas over garages are included in the finished square footage that is at the same level in the main body of the house, but only if they are connected to the house by a continuous finished areas such as hallways or staircases.”

Conclusion

ANSI is pretty clear that for a finished area to be included in total GLA it must be connected to the main house by a “continuous finished area such as hallways or staircases”, so keep this in mind when planning your next addition and you will get maximum value for your investment. Did I leave out anything that you have a questions about? Feel free to leave a comment below and we’ll continue the conversation.

If you liked this post subscribe by email (or RSS feed). Thanks for visiting.

Comments

  1. Mark Stacey says:

    I’m representing a client on a purchase of a house that has 2 room additions totaling about 520 sq ft in Irvine, CA. Both areas are included in the living area sq ft of the house on the MLS (source estimated). 1 room is a side patio that has an entrance through a french door from the kitchen-family room, the other area is attached to the master bdrm. Both patios or areas attached to the house have aluminum roofs, no heating or AC vents, 1″ thick cord board walls with no insulation and poly glass windows.

  2. Rick Taavon says:

    Trying to understand what counts as finished square footage. Looking at a home where first floor (all above ground,not basement) where heating and cooling provided by wall units and there is no duct work in a finished space. Does this count as finished space when calculating price per square foot of home?

    • If it is above grade it should be considered finished space. If most other homes have central heat and air then the fact that it has wall units may affect its value. Are window units common?

  3. We have an area that is a mancave that you have to enter the garage to get to when we purchased the house 8 months ago the appraiser counted this as livable sq footage and now we are refinancing we find out this is unusable for value the new appraiser will not even give use a credit for this 331 sq ft. Is there anything we can do?

    • Per ANSI standards any area that you get to by going through an unfinished area of the house cannot be included in the gross living area. I would say the first appraiser was correct in how they handled the situation. While this area cannot be included in the gross living area it should still be included in the overall value of the home. If the man cave area contributes to value it should be included in the final opinion of value. The amount of value it contributes will depend on the quality of construction, degree of finish, and other factors. I would ask the appraiser why they did not give any value for this room.

      • The mancave area in finished comparable to the rest of the home in fact we just had the bathroom completely remodeled (10k project) in this area it was previously a utility type washroom and now it is a completed bathroom with tile shower. Would this be a lesser price per sq ft for this area or is a dollar amount adjustment usually given for this?

        • This type of area is not included with the main level gross living area but if it contributes value to the home then this should be reflected in the appraisal. If a comp does not have this feature then an adjustment should be made. The value it contributes can be determined by locating sales with this type of feature and then comparing it to another home that does not have this feature. Due to functional issues, the dollar per square foot is typically less but this should be verified with market data.

  4. Fred Blum says:

    Our attached 2 1/2 car garage has a separate room (10’x20′) that functions as a laundry room and workshop for my wife’s hobby and in home business. The area is finished with sheetrock, tile flooring, window A/C and Baseboard heating. This area can be accessed from the kitchen through a separate door in the garage or directly from the outside through its own man door.Will this qualify as gross living space here in NC.

    • Thanks for the question, Fred. If you have to go through the garage to get to the room then it will not be included in gross living area, however it will be given some consideration but not to the extent of the main living area.

  5. Misty Taylor says:

    Hi! We are having problems finding answers. Our house is a split foyer, part of it over the garage. Walk in the front door, go up six stairs to the living, dining room, kitchen, three bedrooms and two baths (1700 sq ft). From the foyer, go the other way, down six stairs, to another living area with a large window, bedroom with closet and full bath, and two storage closets, one which holds the hot water heater (750 sq ft). Also down there is a door that walks out to the garage. The lower part does not have duct work run to it, so no central a/c (although it stays plenty cool) or heat like the upper level. It does have a stand alone gas fireplace for heat. It is finished off just as well as the upper level, except for cheaper flooring. Question is, what all needs to be done to the lower level in order to include it in the total square footage of the house? Thank you for your time!

    • If the basement is finished to a similar degree as the upper level then you should get some value for it, however, since it does not have a permanent form of heating and cooling you will not get the maximum value. Running central HVAC to the basement should allow for you to get more value. You will need to make sure that the current system has the capacity to handle the additional square footage or you may have to upgrade your system.

  6. Jimmy M. says:

    I am just completing construction of a new home in a private gated golf course community in Flagstaff, AZ. Most of the newly constructed new homes in the community are selling in the $250/SF of GLA range for single level 2200-3200 SF with finishes I would class as “very good” (A- to A but not A+). The house in question has the following features: 2261 SF in the main living area with 3 bedrooms and 3 full baths, 704 SF finished 2.5 car garage (the 1/2 is golf car size), 407 SF attached “office or mother-in law or guest” quarters with full bath and “executive” kitchen with an exterior entrance and also accessed thru the garage, 789 SF of deck with about 65% covered, 3 fireplaces and 600 +/- SF of finished and heated second story storage space accessed via 4×6 “motorized “garage/attic lift”. The interior and exterior finishes are A- to A in quality.
    With all that in mind I have 2 questions: 1) About what range of value per SF would you use for the 600+/- storage space? (Note: it is also useable as a play room and has more than average head room for adults–could be used as a pool table rec-room, etc.) and 2) Is the Mother-in Law/ guest/office part of the total gross living area and if not, what range of SF value would you place in it?
    Thanks so much, I look forward to your comments.

    • I’m sorry but I would not be able to comment on the range of value per square foot that would be typical for your area since it varies from location to location. If it is necessary to go through the garage to get to the mother in-law suite then it will not be included in the overall gross living area of the home. If it has access from the main living area then it will be included. Even though it may not be included in the overall GLA you will still get credit for it but maybe at a lower rate.

  7. Bob Lusk says:

    Tom – I converted my attached 950SF garage into an independent living area for my in-laws (2 bedrooms, 1 1/2 baths, complete kitchen, pantry , walk in closets separate heating and air and separate entrances from the garage/joint laundry room/outside porch) and had a new 2 1/2 car garage added to the front of the old garage that was converted at a cost of over $90K. This area is completely private and can be locked separtely fom the main house. My appraisaer has indicated that he can only give me credit as this being living space since it is under the same roof. I’m only getting crediit for about a third of the amount it cost me to build. Should there be consideration given for this area being a complete and separate living area? We share the same uitility systems.

    • It sounds like the garage conversion was finished out similar to the rest of the house since the appraiser included it in the total heated and cooled living space. To be clear, you added an additional 950 s.f. of living space, as well as another 2.5 car garage. These should add value to the home however you may not get dollar for dollar on your investment. The exact amount of contributory value for the added living area and garage will all depend on what buyers are willing to pay for it in your area. The appraiser should have used comps that are similar in the total living area of your home so that they can measure the market’s reaction to this size home with all the amenities you have. I always recommend that owners interested in doing home additions or renovations get a subject to appraisal so they can see if the added value is equal to or greater than the investment.

  8. April Sellers says:

    Hi! We are looking to purchase a home that is 24 years old. The home inspection report found that the library, which is an original part of the main structure, has no HVAC. So, this room is not heated or cooled. Is this still considered part of the GLA? I am trying to understand the real estate laws for our state, but it hasn’t been an easy investigation.

    • I guess it depends on the degree of finish for the library. Since you said that the library is part of the original part of the main structure I am going to assume that it is finished to the same quality level as the rest of the home. In this case I would probably include it with the rest of the square footage but also deduct for the cost of installing the HVAC duct work to the room. If the quality of construction of the library is not the same as the rest of the home I might add a little to the value that would reflect its contributory value to the rest of the home.

  9. Shamair Berry says:

    I recently finished .y garage into a “bedroom” I did not change the front of the house by rempving the garage door. But the inside of the garage has a heat source a window, and entrance from the inside of the house should I add a closet for credit? Or what can I do to get the correct credit?

    • While it can be useful to you as additional living space, it cannot officially be considered gross living area and a bedroom because of its non-permanent nature. This is good and bad because while it gives you additional space it cannot be officially counted. This is not a bad thing because taking away your garage could be a negative factor in your neighborhood, it depends on what buyers expect of homes in your area.

  10. Do you have the ANSI code for this to reference? I actually have an appraisal that a detached unit was included in the gla and we are trying to say it shouldn’t be. Thanks!

  11. Realty Rob says:

    Can you provide a link to the ANSI guidelines to which you refer?

  12. Hi Tom,
    I am from Michigan and i am planning to open up an unused space that is over my Living room.
    now if i put up sky lights and a window with the HVAC and hardwood floors , what do i need to do in order for this new area to be counted in the total square footage and also get a higher value at assessment of my home.

    the main purpose of this upgrade is to get my appraisal higher .

    any ideal will help.

    thanks,
    Bobba

    • Hello, Bobba. The best thing is to make sure the construction quality is similar to the rest of the house. You also want to make sure the access to it is a permanent type of stairs rather than pull down attic stairs. You also want to make sure that it follows the guidelines I outlined in my “Can a finished attic be included in the appraisal of a home?” post.

      • Hi Tom,

        Yes I already have 4 bedrooms upstairs and this will be a loft that can be having its own access and i am planning to have a couple of Skylights and also there is a oval shutter window for the roof to breather. I plan to remove this and have a new window.
        So for this room to be called a Bedroom like a 5th bedroom.

        • Sounds like you will be doing everything right for this to be considered gross living area to help increase the value of your home.

          • Last questions,
            I am getting estimates from contractors in the range from 9k to 15k. and am confused.
            for a 200Sqft area with two sky lights and also having one new window done and Hardwood installed along with one Hvac vent and standard electrical lout lets
            can you say the best ballpark i can be spending ?

            regards
            Bobba

          • Since I am not a contract it is difficult to comment on this. Could be the high cost of permits, materials, etc. I know that adding or finishing square footage after something is built does cost more than doing it at the time of original construction.

          • Hi Tom,
            We have a 27 by 14 area attached to the home that was built decades ago by the original owners. We would like to finish it off. There is a step down to the room, connects to the living room and has a separate entrance. Would it be considered living area if we finished it?

          • If you finish it off to the degree of the rest of the house and make sure it has a permanent source of heating and cooling that the majority of buyers would accept then it should be considered living area.

      • Thanks Tom,

        but my contractors were not going to pull permits for finishing this job 🙁
        should i be concerned it the mail goal of this project is to increase my appraisal value ?

        Cheers
        Bobba

        • If they do not pull permits there is a chance this area will not be able to be counted in an appraisal. The lender will want to know that everything was done per the building code.

  13. Terry Sklar says:

    Tom,
    Discovered you while searching for Florida court ruling, (a “few” years ago) concerning enclosed patios as GLA. Are you aware of this or am I dreaming?
    Terry Sklar, CRA-33 (Idaho)

  14. Suzanne Delmege says:

    If a property has a finished attic space that is original to the home and includes a staircase, closets, and a large window but has a footwall of 4 feet with a pitched roof and plenty of walking area, can it be included in the square footage? Can any value be given to it even if it is not considered a bedroom?

  15. we are having a house built, we had an appraiser that said that our 563sf above garage which is connected to the house through the garage and is connected to the main central heating/ac unit is only worth 35% of value for the ltv of our consruction loan is correct? There will be a final appraisal done once tbe house is completed and we need to know the following: we made a change to the plans to include a 2nd stairwell which would connect the rooms above the garage to main house from the inside that was not included in the original specs that the appraiser used to do tbe appraisial so we need to have builder change the floor plan to show the 2nd
    hallway from inside the main living area upstairs to connect both areas in order to get 100% on first apprasial or will the addition be captured on the final apprasial and be adjusted accurately.

    • I would think that if you are not getting full value for the room above the garage then the bank may not lend you enough money for the construction. You may want to check with them to see what their policy is. If it were me I think I would want to take care of the issue up front so that it would not cause any problems down the road.

  16. Lisa Smith-Weber says:

    I have a home with an area that was originally considered a garage workshop that the builder made so it could easily be converted to living space (a bedroom with walk-in closet, laundry room, and a walk-in pantry. It is accessible from the rest of the house through an open hallway (no leftover doorway), is heated and cooled with the home’s existing central air unit, has continuous flooring and paint that is the same as the rest of the house with no odd threshholds. It has a walk-in closet, window that exactly matches the other windows and identical amenities to the rest of the house. The one big kicker: the addition was never permitted. At one time this home had a master bedroom with sitting area which was converted to an additional bedroom including a closet and is accessed by the hallway, not the master bedroom. This was also not permitted. All work is beautifully done and the work is sound and structurally equivalent to the rest of the home. On the tax records, this home is listed as a three bedroom, two bath, but now is a five bedroom two bath. How are the unpermitted but completely seamless rooms considered in the value of the home? The reasoning was that as long as additions were made “under the existing roof and no exterior walls, supporting walls or roof structure were breached that it was “okay” not to get a permit.

    • I think the important thing to remember it why the appraisal is being done. The lender wants to make sure the home is sound and the value is sufficient to cover the money they have loaned on it. The permitting process is setup to make sure the work done on the house is performed in a professional manner so that the likelihood of bad electrical wiring causing a fire is reduced. Fellow appraiser Ryan Lundquist has written an excellent article on his blog about this. He outlines how lenders look at this and how you can get the property permitted so that all of the area can be included in the appraisal. Hope this helps.

  17. Hi Tom. I live in San Francisco where sales prices run between $800-$1,600/sq.ft. We have a 2-unit house on a steeply sloping 25’x100′ lot with zero lot lines. We could excavate out another level to build kitchen and living room space below so that the lower 1-bedroom unit could be converted to a 3-bedroom unit with bedrooms on the second floor and kitchen/family rooms on the bottom floor, which will be between 1′ to 10′ below grade. It has been estimated that a high-end remodel will cost us about $750/sq.ft, so if we can sell for >$1,000/sq.ft., we will have gross profit of about $300,000. Will banks lend against this condo? Will Realtors accept the bottom level square footage as part of GLA? Thanks!

    • John, while I am not familiar with your area and the bank’s policies I do not see why they would not lend on the condo but I would check with the bank in question just to make sure. From an appraisal perspective the area that is below grade will need to be classified as basement and as such cannot be included in the overall GLA. With that being said, even though it is classified as basement the amount of consideration it is given may be different based on your area. I would check with a local appraiser to see what the local custom is. Good luck.

  18. Home appraisal has the distinct feel of Soviet central planning. Prices (value) because I say so.

  19. Hi Tom. There is a house I’m looking at. It is listed as 2436 Sq ft, yet the listing clearly says the basement is unfinished. The county GIS shows the floors each have 1218 Sq ft. The floors are vinyl and carpet. Its listed at $219.9k. Is the listing correct to show both finished and unfinished space?

    Thank you

    • MLS offices vary as to how much information they provide. They should provide information about both finished and unfinished areas but the square footages should not be combined. It sounds like they are adding both the finished and unfinished areas together to get the total of 2436 sq ft. Hope this helps. Let me know if you have any additional questions.

  20. Hi Tom, I have a listing that has a detached pool house that is heated and cooled, has a full kitchen and half bath plus large living area. Would this be considered in the total square feet?

    • While you will get some credit for this improvement, it cannot be included in the gross living area of the home. ANSI standards prohibit these areas from being combined because the pool house is not adjacent to the main living area and it is necessary to exit the main house to go inside the pool house.

  21. Tom,
    We have a 160 sq foot sunroom. It’s very much like you described above. Built on the back of the house outside what was formerly the rear exit to the back yard. The sunroom is carpeted, finished and painted with sliding glass doors covering two sides. We are about to get an appraisal. Is it worth adding an electric baseboard heater? Will that allow it to be added to usable living area?

    • Thanks Kate for the question. While the electric baseboard heater would help the enjoyment of people using the space I would not count it as part of the main living area of the home. The fact that it has a separate heating system supports the decision to call it an enclosed porch or sunroom.

  22. Judith Lian says:

    what if the addition is attached to the house but you have to go thru the master bedroom and bath to enter it and a window in another room opens up into the addition is this legally added into the sq footage of the home? How would this effect your resale value?

    • If the addition is heated and cooled and of similar quality as the rest of the home you should be able to add it to the overall gross living area. The fact that the access is through the master bedroom and bath may affect its functionality since it is not very accessible. Another home with similar square footage may be worth more because the access is better. This is something that may need to be addressed in the final value reconciliation.

  23. Hello

    I am planning to buy a house which has two units. Both units are independent of each other and the lower unit is built in a daylight basement. Both units in fact have separate mailing addresses. However when the property was appraised, the lower unit was valued much lesser that the upper unit. I read above that below grade spaces do not get same consideration as above grade but in this case it is an entire unit that is a 1500 sq ft space, has two full baths and 4 bedrooms with condo grade finishes. I was wondering that even if it is not valued at the same price as the unit above – what will be the per sq ft percent at which it is typically evaluated? It was included as part of the GBA but since the lower unit was appraised at a lower value – this brought down the GBA.

    Here’s the comp – just wanted to check if this is typically what the property would be valued for in your opinion
    1. Upper unit @ $157 per sq ft
    2. Lower unit @ $24.75 per sq ft – this figure is lesser than 1/6th the value of the square footage for upper unit.

    So even though this is considered a duplex and both units are in superior condition – does this ratio seem appropriate?

    • Just as a reference – the carport was valued at $14 per sq ft… so it seemed pretty weird that the unit itself was valued at $24

    • There are several ways this could have been looked at. It may have been considered a single family residence with separate living quarters for a teenager or mother in law. In a case like this, where the main use of the subject property is single family residential the basement will provide some contributory value, however it may not be as much as the upper level. From your question this appears to be the way the appraiser looked at it. If, on the other hand it was a duplex type of arrangement and the units were producing income then the basement unit may contribute more value based on its rental income. I hope this helps you to understand the various ways there are to look at a home like you describe.

  24. Marilis Klevisha says:

    Hello,
    I had an appraisal done and the appraiser didn’t count the dressing room and walk in closets inside the dressing room because it is above the garage. I have access through my bedroom and is fully finished (a/c, heat, carpet, lights.) . the area is about 333sq.ft and is bringing my appraisal down. Below are the comments of the appraiser. Any feedback will be appreciated!!!

    The Home Owner has contested the amount of GLA (Gross Living Area) that the Appraiser has stated.

    They provided a sketch by the builder with 3,406 Square Feet of TOTAL area (See Addendum). It is

    unknown by the Appraiser what the TOTAL area includes. It it the opinion of the Appraiser that the total

    shown is UNDER ROOF dimensions and not the LIVING AREA. All Appraisals provided by Wyman

    Appraisals show TOTAL LIVING area and do not include garages, porches, and/or 2 story foyers in the

    total living area. Half stories are treated as such.

    The subject has a 2 story foyer (see photo) and also has what is considered as a half story finished area

    over the garage. This area includes the dressing area and the closet. (The closet was not photographed by

    the Appraiser). It is unknown if the Builder included these areas as GLA in his Total Area.

    The Appraiser made measurements of the Subject and found them to be correct to the Assessors records

    within 3 Square Feet. The Assessor also did not include the 2 story foyer in the second floor GLA, and

    also treated the area over the garage as a half story.

    As such, the GLA provided by the Appraiser is the total square feet of LIVING AREA of the Subject

    according to Fannie Mae Guidelines.

    • Sorry to hear about your problems with the appraisal and square footage. Without looking at the property myself it would be hard to make a statement without any accuracy, but I do have some suggestions. Look at the sketch provided in the appraisal and see if the dressing room is included, if it is not then you may want to ask the appraiser to include it since it is finished. With that being said keep in mind that there are several criteria that must be met in order for this area to be included. The first criteria is that at least half of the finished square footage must be 7 feet where the ceiling slopes and those areas less than 5 feet are not counted in the finished area. I’m including a blog post I wrote about attics and ceiling height but this should also apply to the room you are talking abut. I hope this helps. http://birminghamappraisalblog.com/appraisal/can-a-finished-attic-be-included-in-the-appraisal-of-a-home/

  25. Andy Fogarasi says:

    Hi Tom,
    Answers to the question(s) in this blog are precisely what I am looking for. However, there is one item I would like to know that you have not addressed:

    Assume there is home and a fully detached outbuilding with no physical connection between the two. The outbuilding/guesthouse is fully appointed (heat, A/C, water) with bedroom, bath, kitchen, a small living area and porch, and is equivalent in quality to the main house. I clearly understand that the outbuilding components are not included in the description or value of the main house living area. Further, I understand that the outbuilding will be valued at a lesser sq/ft rate than the main house. And their lies my question: How much is the outbuilding price sq/ft discounted in general assuming finish and quality are equivalent to the main house???

    Thank you,
    Andy

    • Andy, thanks for the question and reading my blog. This is truly the million dollar question. Real estate is location specific and it will vary from place to place. One feature on a house may be worth $5,000 in one neighborhood and $10,000 in another neighborhood based on how much importance buyers in that area place on it. The job of the appraiser is to study sales within the market and determine the value that buyers place on the features of a home.

      I have worked in areas where having a guest house like the type you describe is a premium, and sellers get top dollar, however I have also seen a similar feature in a neighborhood where it was the only one. In this second area the majority of buyers had no need for this extra living space so most people did not have it except for this one individual. The value of the detached living area in the first example is going to be worth more than the second example. There is no rule of thumb for how much this additional area will contribute to value so it is hard to say how much it would be worth. The best way to determine it’s value would be to compare sales with the outbuilding to those without it to see how much difference in sales there is. I know I was not able to give you the exact answer you wanted but I hope this explains how the appraiser must analyze this type of assignment.

  26. richard berger says:

    Hi.I just purchased. a house with a detached 2 car garage there are 2 heated and cooled rooms above the garage with separate central ac unit.The garage is connected to the house by a covered breezeway and slate deck with a ceiling fan.Would this be area be considered part of the total square footage of the house.Thank you.

    • Thanks for the question Richard. In order for the area over the garage to be included with the overall gross living area it has to be connected with heated and cooled living space, so it would not be included. With that being said, you will get value for that but not at the same rate as the other square footage. Hope this helps.

  27. Leigh Beshears says:

    Hi. My bank just sent me a copy of a Residential Evaluation Report done as part of a refinance. My bank is referring to it as an appraisal and the amount I can borrow is based on their valuation, which seems low to me. Our home is cape cod 2 story on 3 acres. There is a huge walk in attic (about 600 sq. ft +/-) that we put sub floors in but is not “finished” space. We have an attached 2 car garage and a detached 2 story 2 car garage with a finished 800 sq. ft. game room w/bar and plumbing upstairs. This room is accessible through the garage and has a door on the outside. The door presently opens to nothing but my husband is going to build a covered deck with stairs. We also have a 16×16 ft. outbuilding with concrete floor, shingled roof and covered porch. There is a room above with separate outside entrance. This room is more a loft as the room is like an upside down “V.” We also have an 18×39 in-ground pool. Most of the comps are either smaller ranchers with acreage or same size/style home but no acreage. Two seem to be modular homes. I think the comps are off and am having a hard time figuring out what criteria they used in the adjustments. None in the BPO results which seems to be what they went with are in my city and 1 isn’t even in my state (I live in AL, 3 miles from TN line) Only one has a detached garage. The appraiser never entered the house and may not have gotten out of the car. There is a picture of the detached garage and the house. No mention or pictures of other building or pool. The appraisal says its a one story with 2 bathrooms. It’s actually a 2 story with 2 and half baths. Is that supposed to be distinguished? Our last official appraisal shows the house as 1863 live-able sq. ft. but this one shows 1817 which is what it shows on tax assessor site. The pool and other building are not shown on the tax assessors site either. I want to speak with the Appraiser but want to make sure I understand how appraisals are written these days and what value non livable space receives. Is there a formula that we could use to determine even a low value on the outbuilding (built 1998), the pool (1999) detached garage and bonus (2005) ? Thanks.

    • It sounds as though you had a drive-by appraisal on your home. Even with a drive-by the appraiser is suppose to have accurate and dependable data to develop a reliable value estimate. Your property sounds so unique with many features that a drive-by was probably not the best choice. You might want to request that the bank get an appraisal with an interior inspection so that the appraiser can consider all the improvements, since it sounds like he missed some. Good luck!

      • Leigh Beshears says:

        Thanks for your quick reply. Originally the bank didn’t even have anyone come out. Because I balked at the price they arranged a “drive by.” I suggested that it would be better if they came inside but by the time my rep got back to me it was already done. I would have expected them to notice an outbuilding and a pool. The value came back higher but still lower than expected. I’m guessing that was based on them noticing and including the detached garage. The comps in the report are extremely low. Most are not comparable, not in same area and were much lower per square ft than the majority of houses sold in same time period. One isn’t even a sale, its a quick claim transactions and a few are HUD sales. One sold for $250k in Apr2014 and HUD sold for 180k Jan2015. That one actually would have driven my price up anyway but didn’t make it to the BPO list. I assume the report must be designed to give “worse case scenario” info to the bank. Based on other sold and for sale properties that are more comparable, the value is at minimum 10% too. Higher if we count interior improvements (granite,tile, hardwoods) pool, outbuilding and game room. If this report can actually count as an official appraisal that could come back to haunt us or hurt other sellers, I will definitely get a full Appraisal, even if I have to get it myself. However, if the info can’t be used elsewhere, I really just need it to be 5-10% higher than it is. I’m assuming they will take the previous on site appraisal and adjust square footage? Should I ask for an adjustment for 1/2 bath or does that not count? Is there a minimum value that any appraiser should be comfortable adding in for the outbuilding and pool since those were never photographed or included? If I got my own outside Appraisal by a licensed appraiser, does the bank have to accept them? Thank you for all your help.

        • If you do not agree with the comparables and know of better sales then you can present them to the lender for a reconsideration of value, however pursuing a full appraisal with an interior inspection would probably be better. You may also want to make sure the appraiser is familiar with the area and has adequate experince in your market.

          The appraisal report will only be viewed by the bank and you so it shouldn’t have a detrimental affect other sellers. If you get another appraiser yourself it probably will be acceptable to the bank because banks typically require the appraiser to be on their panel and they have to choose them using a rotation technique. You may want to just ask the bank for a full appraisal using a local appraiser who has extensive experience working in your market. Hope this is helpful.

  28. Tom: This was a very good topic for your blog as it addresses a problem that many homeowners or real estate agents and brokers have. The ANSI definition mentions square footage “at the same level.” GLA typically does not include finished area below grade level (finished basements). You sort of addressed it under the topic of man caves (mine is in a den, so it qualifies as GLA), but could you clarify your local practice concerning below grade living area?

    • Sure thing Richard. We have quite a few homes with basements in our area, and the general rule is that any level of the home that is below grade is considered basement. There is such things as a daylight basement where the earth covers one side of the house and the other is a walk out with doors and windows. This level is all considered basement and typically contributes less value than the main level. Great question, thanks for asking.

  29. Thank you for sharing Tom. In our area, we often see real estate agents advertise living area that includes a low cost converted garage, where the finishes are not up the level of finish as the rest of the house and may not even be permitted.

    • That’s a great point Gary, and one I have been struggling with in my area. This area should not be lumped together with the main level living area. It can give the wrong impression when calculating price per square foot.

  30. C’mon, Tom. Why aren’t you giving the man cave value as square footage? 🙂 It’s not always easy for a home owner to digest that an added area does not count for the square footage. But thankfully just because something cannot count toward the square footage does not mean it cannot count in the value somehow.

    • That’s so true Ryan. My main goal here was to let them know that it is given value but not the same as the main heated and cooled living area, and to keep this in mind when planning home additions.

      • Daniel Binkey says:

        So, we have a split level home with a storm shelter room with 12 inch thick concrete walls, without windows approximately 10*12. Is this considered GLA and we also have a class block enclosed patio area with it’s own heating and air conditioning system adjacent to the large bathroom, changing area adjacent to in-ground swimming pool (down stairs living area has french doors leading to enclosed patio that has it’s own french doors going out to pool area) dies this qualify as part of GLA

        • Daniel, storm shelters are not typically included in GLA especially if they are in the basement. The glass block enclosed patio may be included depending on the level of finish and access, etc. If you’ve had a past appraisal done on your home you could look at it to see how the appraiser handled it and if they included it in the GLA.

Speak Your Mind

*

 

Sign up and get valuable content!

  • Get local real estate market data
  • Learn valuable information from a seasoned appraiser
  • Find out what adds value to your home

I respect your privacy. Your information stays with me.