New Requirements
As I write this post the Birmingham, Alabama real estate market is a little over one month away from making it a requirement that local agents report accurate square footage on their MLS listings. In the past this was not mandatory and in August of 2010 agents were given an option to
add this information if they chose to, however on May 1, 2014 they will be given no choice and they will have to include this information. There are various ways that agents can get this information including county records, an old appraisal, the agent measuring the home themselves, or hiring an appraiser.
Source of Data Options
The quickest and cheapest source of this information is to take it from a previous appraisal report. You obviously want to make sure that no square footage has been added to the home since the appraisal was completed. You may want to ask the homeowner if they have finished off any basement or attic rooms since these are common renovation projects. The next option is to use information the county has. If you are going to go this route then you may want to check out my tutorial on how to use county records for square footage information. Remember that the county does not always have the most accurate data, however if you choose to use it you may want to ask the homeowner the same questions regarding any home additions. I can’t tell you how many times I have ran across county data that did not reflect a finished out basement, so keep that in mind.
The third option is one that many agents in other locations choose, and that is to measure the house themselves. It may seem overwhelming at first but once you have measured several you will see that it’s not that bad. I want to share some tips on doing this if you choose to do the measuring yourself. The current standard for measuring homes is known as ANSI Z765-2003, which was developed by the American National Standards Institute and can be viewed by following the link. Lets take a look at several tips to help you get started.
Tips to Help You Properly Measure a House to Get Accurate Square Footage
Measurements are Taken from the Outside Wall- This seems pretty obvious but I thought I would mention it just to make sure. Measurements are taken from the exterior finished surface of the outside wall. If you have a straight up two story home the second floor would be the same as the first level, however this is a little more complicated when you have a home with a half story. You must then measure from the inside and add a little for wall thickness. In an attached home you measure from all exterior walls where possible and from the centerline of the common wall.
Openings to the Floor Below- Whenever there is an opening to the floor below this area cannot be included as part of the gross living area. The area of the stairs leading to the different level is included as well as the landing before the stairs.
Above and Below-grade living area- Above grade living area is the total area above ground, whereas the below grade area is any living area that is even partially under ground on any side of the house, and we classify this as basement. This confusing to a lot of people buy if there is any wall of the home that is even remotely underground then that floor is below ground.
Ceiling Height- Ceilings for the most part must be at least 7 feet, however there are some exceptions for ceilings with beams or ducts. If you have any questions about this just let me know and I can give you further specifics. Sloped ceilings are also unique too because at least half of the finished square footage in the room must have a ceiling height of at least 7 feet. Any sloped areas less than 5 feet cannot be included at all. I recently answered a question about sloped ceilings for a reader if you want to learn more.
Finished Areas Connected to the House- If there is finished area that is connected to the main residence by a finished hallway or other finished area then you can include that with the total finished area, however if the area is not connected in this way it cannot be included.
Garages and Other Unfinished Areas- Unfinished areas such as garage or basement are not included with the total heated and cooled square foot calculations but can be listed separately.
Porches, Balconies, and Decks- These types of areas are listed separately as well and not included in gross living area.
If All Other Options Fail
The very last option would involve getting an appraiser to measure the house for you because they do this every day and can do it quickly and accurately, and you will be provided a sketch that you can include as an attachment in your listing. If the owners do not have an old appraisal, or you do not trust the county records, or you don’t feel comfortable doing it yourself, then this is the best option. You can price the home with confidence knowing exactly how much living area the home has and you will not be surprised when the bank appraisal comes back and shows that the home does not have as much square footage as you thought. If you want to go one step further you can get a pre-listing appraisal, which will include the sketch as well the market value of the home. Please let me know if you are interested in this option or have any questions, I would love to help you out.
Better Data-Better Listings
One final point that local agents need to think about is that as the database of gross living area figures grows for properties, the market reports for price per square foot will continue to be more accurate and you will be able to do your job with more accuracy. Just think of a scenario where you have accurate square footage information for all of your sales in your CMA and it indicates that homes are selling for between $100-110 per square foot and your client wants you to list it at $120 per square foot. You will have reliable market data that you can show them that it is priced too high. If you want to know more about the price per square foot of homes check out this article I wrote as it may help you in pricing homes.
Give me a call now at 205-243-9304 if you are ready to order a sketch, pre-listing appraisal, or if you have any questions about how to measure a home or get accurate gross living area calculations. Please let me know as I have made it my goal to assist real estate agents so that they have a better understanding of this new requirement for their listings.
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Can an unfinished attic closet be considered part of the sq footage of a house in Birmingham
I would say no based on the way you have described it. No unfinished areas can be included as part of the gross living area (heated and cooled) for the property.
This is very helpful information. I am planning to measure my own house as I have two appraisals. The one when I bought the house, and the one when I refinanced the house. Somehow the second appraiser found 500 sq feet that the first one didn’t see. All I’ve done is a little interior painting, nothing more.
I think it has to do with the downstairs finished basement that the first appraiser counted as a bonus room, and the the second counted as a 4th bedroom, despite the fact that it’s an open stairwell with no separate door into it. Or maybe he didn’t subtract the stairs and landing or miscalculated the square footage of the garage. I really don’t know, but I would like to figure it out.
There are a lot of places for error when measuring a home Sandra. If you are off by a little bit on a long wall the difference can be multiplied. One problem I have seen in the past is including open areas on the second floor. The basement area should never be included in the overall heated and cooled living area of the house but should be counted separately.
Actually finished basements may be included in certain markets, where that is the established method. Fannie/ANSI allows for these market differences; most common these differences show up in Hillside Ranch homes in the Western US.
Thanks for pointing this out Mark. I do realize that some areas may have situations like this but I think the important point to learn from this is that it is all handled the same way. Agents should be aware of how it is handled so they can all be on the same page and compare apples to apples.
This post is very informative. Thank you for the information. Please note, I have referenced it on my home insurance. http://maharinsurance.com/michigan-insurance-to-home-value/
Thanks for link Dave.
Let me suggest to you all, ( if you haven’t heard of it) the app for your smart phone call ” room scan” it’s about 5 dollars and measures a room simply by placing your phone on each wall. We use it daily and its diagrams at the same time
Thanks John, I’ll check that out.
Great info! Thanks Ryan for pointing out Tom’s blog. I got to learn from both of you today which will help me with my future clients. Knowledge is power! 🙂
Thanks Beth, glad it could help you out.
Great resource, Tom. It does take some knowledge and skill to measure properly. It is not difficult per se, but you definitely have to know what to include and exclude. What do you use to measure? Laser? Measuring wheel? Tape measure? While a tape measure takes longer, I like to use it so I can see the numbers exactly and know for sure I am getting an accurate reading.
Thanks Ryan. I also use a tape measure. I keep telling myself that I am going to start using a Disto, however I have not yet. I am with you because I like to see the numbers. While some people round while measuring I like to be as accurate as possible with the measurements and then round the area calculations. It’s amazing how rounding can effect area calculations when you have a long wall.
Good for you, Tom. For years I used a measuring wheel before seeing the light. It’s just really difficult to be accurate when rounding or not taking into consideration a difference of inches here and there. Some appraisers swear by the Disto, which is great for them, but just because you use technology does not mean the measurement is accurate. There still has to be an understanding and application of knowledge behind the technology. For instance, I was provided a sketch by a Listing Agent (who was an appraiser). After a very careful measuring, his sketch was clearly off by 100+ sq ft (which was ironic since he jabbed me about using a measuring tape). 🙂
It seems easy to make an error by including the trim in the measurement too. Sometimes trim can stick out by one or several inches. If you include the trim, it can make things off pretty quickly.
And sometimes that 100 s.f. can be the difference between a home appraising for contract or not.