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 sense 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.
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.
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.
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.”
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.