Should The Agent Include These Areas In Square Footage?

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

What areas should the agent include in their MLS listingsThe 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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Comments

  1. Richard Winchester says

    The best man-cave I ever happened upon was an actual cave carved out of granite on the side of the hill well below the house. The owner used it exclusively to store and work on his Harley Davidson Motorcycle. ( He also added that he spend all his time and money on vacations and his motorcycle!)
    Whatever value i gave it was probably way too low!!
    Appraising can be fun.

  2. Lane Nivison says

    I work out of the S. E. Michigan area as an Cert. Res. Appraiser . In our area we have a lot of raised ranches , tri-levels and quad style homes . There is not a MLS listing for these homes that does not include the lower level below grade as part of the GLA .
    ANSI standards say below grade is not included ( no exceptions ) . My con-ed instructor agrees and says that it can’t be used . When asked how to find comparable properties when faced with this situation , she replied ” Use the subject’s lower level to compare with the MLS listings , but write an addendum explaining why you had to do this “. Is there a better way to do this , as that just creates more work .
    Your input would be appreciated .

    • To me, that doesn’t make sense because you need to know how much of the total square footage of the comp is in the basement. If you know this then I can understand her answer. Is it possible to find out what the basement square footage is using county assessor information? If so you can then deduct that from the total in the MLS. Do you know what other appraisers in your area do? I think you’ll probably need to do what is generally accepted in your area.

  3. Thanks for the post. I’m an appraiser in San Antonio and it seems like there’s an abundance of homes that FixnFlippers are buying that are 1200 sqft. with an attached garage. They go ahead and convert it to “living space” then market the home as 1600 sqft. noting that county tax records are wrong. NO NO NO!!! the tax records are not wrong. They failed to get building permits because they don’t want to pay tax on additional square footage. I check on permits for every home I appraise and for the sales I consider for comparables. I think they all went to the same seminar and are mis-informed on what is and what isn’t considered livable sqft. Key words: Detached as in detached guest quarters, Permanent as in permanent source of heat. A wall/window AC unit w/heat is not permanent. It’s personal property. Keep up the good work.

    • Thanks, Reg. It sounds like this may be an opportunity to provide education to these investors as to what appraisers consider GLA. If they know going into the deal that the conversion may not be counted then they may change the way they do business. I have found that these fix and flippers are a good source of business when you find out who they use for their funding.

  4. My home is built a little weird. The kitchen is actually in a finished walkout basement therefore I am assuming that it is not calculated with living gross area. I considered changing one of the bedroom on upstairs (living gross area) into a kitchen. Would that increase the value of my home since I would be taking a bedroom away to replace with kitchen? Also I have searched and there are not homes like that in this area with kitchen in basement. How would appraiser show comps to determine value?

    • That is a unique floor plan. If it is in a basement then it would not be included in the total above grade living area. This may affect the value due to possible functional issues. It will all depend on what is typical for the area.

  5. Very good information on what is considered gla and what is not. I will use this info when listing homes from now on.

  6. Dude, don’t tell me I cannot count my man cave in the square footage… 🙂 Great job here Tom. I need to do a post like this one of these days. Really resourceful.

    • Yeah, unless that man cave is connected to the main house with a heated and cooled stairway or hallway you’re out of luck. 🙁 You can still enjoy time with other cavemen though. 🙂

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