Should The Agent Include These Areas In Square Footage?

Confused About What Areas The Agent Should Include In Square Footage?

The most thrown around metric in real estate has to do with square footage and price per square foot. People ask me all of the time what homes in this or that neighborhood are selling for per square foot.

Why do they do this? Because they want to take the price per square foot and then multiply it by the square footage of their home to find out what it is worth. Sounds reasonable right? Wrong.

I’m not going to make today’s post about price per square foot because I’ve written about that before. What I do want to do is provide some helpful tips for agents and homeowners as to what is actually considered livable square footage, or gross living area (GLA).

Square footage data within the MLS listings are often inaccurate which can result in misleading statistics. I hope the information I provide today will help agents provide the most accurate details in the MLS.

One Standard To Rule Them All

The information I am providing is based on ANSI standards which is what most appraisers use to classify square footage. If agents and appraisers use the same guidelines for square footage the chances of homes appraising for less than contract will be reduced.

I’m going to break my list up into two categories. The first are areas of the house that you can include in the gross living area (GLA) and the second category will be those areas that you should not include in GLA. It goes without saying that the areas included in GLA are always heated and cooled.

In the Greater Alabama MLS, GLA is the number that goes in the “Living Area (main+upper)” spot. Other cities MLS may be labeled differently.

Areas That Should Be Included In GLA

• The main living area of the house- This is the area that most people are aware of. It usually consists of a living room, dining room, kitchen, bedrooms, and bathrooms.
• Heated and cooled finished areas over an attached garage that is connected to the main area through a finished heated and cooled hallway or stairway.
• The stairwell area can be included in the GLA, however, if there is an opening in the stairwell area that does not include stairs it cannot be included.
• If there is an enclosed porch that has been finished off to the same degree as the rest of the house and it has a permanent heating and cooling source it can be included. This can be a gray area and may need to be looked at on a case by case basis.
• If a garage has been converted to living space it must have the same quality of construction and materials as the rest of them as well as a permanent source of heating and cooling. It must also be connected to the main living area by a heated and cooled hallway.
• Finished attics can also be included in GLA. Again, like the other situations, they must be finished off to the same quality as the rest of the house and have permanent heating and cooling. In addition, the area should have an acceptable method of access. I say this because in the past I appraised a home that had finished attic space but the only way to get to it was by way of drop down stairs. This would not be acceptable to be included in the GLA, although the finished area may add some value.

Another thing I would like to mention about attics is the issues of ceiling slope. There are rules that cover this and which I wrote about in another blog post. It must meet certain requirements to be included so if this sounds like your home you may want to learn more about this.

Areas That Should Not Be Included In GLA

• Porches, decks, and patios should not be included in the GLA because they are not considered heated and cooled living area.
• Enclosed porches that are not heated and cooled and that have a lesser degree of finish than the main GLA should not be included.
• Garage apartments or man caves that are not connected to the main living area by a heated and cooled stairway or hallway should not be included with the main GLA. They will add value but it may or may not be to the degree of the rest of the main GLA.
• A detached apartment or recreation room where it is necessary to leave the main house to get to it should not be included. Again, as in the example above, it will contribute to value but it should not be combined with the main area.
• If there is an area on the second level that is open to the floor below but does not have stairs it should not be included.
• Finished basement areas or any other area that is below grade (ground) should not be included in the GLA. This area is listed separately and may or may not contribute differently to value.
• A heated and cooled finished room that is attached to the main house but you get to by going outside of the main house should not be included in the main GLA.

It is my belief that if appraisers and agents use the same standards for GLA there will be less discrepancy between the amount of GLA listed in MLS reports and that reported by appraisers in their appraisals. This will help reduce the likelihood of there being differences between the contract and appraisal due to square footage variance.

The ANSI measurement guidelines help to provide a common standard for real estate professionals to follow. This helps with consistency so apple to apple comparisons are easier to make which helps to contribute to more reliable results.

Questions?

If you have any further questions about what areas that agents should include in their listings feel free to contact me and as always thanks for reading.

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