Would you believe most people don’t really know how many square feet of living area are in the home they own, are about to list, buy or sell. Our experience with Greater Boston real estate appraisals continues to prove this truth.
ANSI Z-765 (the American National Standard Institute publication) is the go-to method for calculating square footage for single family residential buildings; however, there is no requirement that real estate agents, architects, assessors, insurance companies and appraisers use the same specific standard method for calculating the living area of a home. This lack of a single standard creates several problems for everyone.
ANSI Z-765 is a fair standard used by most professionals in real estate for Gross Living Area (GLA). There are many steps to follow found in the 16 page PDF, but I have it boiled down to 4 key ides for this blog.
- Use exterior dimensions rounded to the nearest foot for each floor
- Include only areas above grade, no finished basements
- Openings: stairwells yes, but subtract certain stairwell and openings to below
- Minimum ceiling height 7’ In sloped rooms; exclude areas with less than 5’
So what is the answer to “What is the Actual Square Footage of a House?” In actual practice, depends on who you are and what your interest are in the GLA.
- Home Owners – Are interested in getting what they paid for and not paying unfair taxes. I suggest you check the assessor record for your home, specifically the lot size, living area and amenities such as bathroom count, garage etc. You may be surprised at what you are being taxed on.
- Selling Agents and FSBOs –Are interested in maximum sale price. I suggest you have verified the true GLA before you list.
- Recent Home Buyers Too late. I recommend that you check your appraisal sketch and GLA (you got a copy at closing). Then compare it to the original MLS advertisement and the assessor’s GLA. Be sure you are not over or under insured since your insurance is typically based in part on the assessor’s square footage.
- Architects and Builders– Most are on the ANSI Z765 standard. To the rest I say, please stop “accidentally” mixing up gross building area and gross LIVING area. Just stop.
- Assessors– Have one job. They must hit a financial target by sharing the total tax burden across the universe of real estate in their city or town.
- Appraisers– Don’t have to, but most use the ANSI Z765 standard. To my fellow appraisers if you don’t own and use the ANSI Z765 standard, I recommend that you buy it.
Here are some more thought on the subject.
- Homeowners: One of the many reasons you will never be able to estimate your house value free online is that all too often the living area and other crucial data reported on public records differs from what actually exists. Therefor all online services are using bad data.
- Real Estate Agents & Sellers: List a home smaller than actual and you have just left money on the table; we see it more than you would believe especially in Greater Boston. Listing homes larger than actual (aka broker puffery) and potential buyers leave with bad feelings about you.
- FSBOs: For Sale by Owner? See paragraph directly above.
- Buyers: You are totally unprotected and at the mercy of the ethics of the listing broker or limits of their knowledge.
- Architects & Builders: Typically use ANSI Z765, although we regularly catch inaccuracies with new construction for varied reasons, primarily due to plans that changed or using the Gross Building Area (GBA). We recently lowered taxes for new home buyers in Newton and Cambridge by alerting the assessor to correct inaccurate brand new records.
- Assessors: the world of mass appraisals comes with mass measurements and mass errors. Inaccuracies are inherent in Capes and Colonials due to use of percentages for upper stories vs. actual measurements, exclusion of an upper finished story, inaccurate subcontracted mass appraisal measuring services, field sketch mix-ups, measurements estimated due to inaccessible exteriors, and exclusion of above-grade GLA in lower levels
- Appraisers: FNMA appraisal requirements for what “is” living area are 100% clear. They require use of the Above Grade Gross Living Area (GLA) only, period. Yes finished basement have value but they ARE NOT part of the GLA. FNMA does not require use of ANSI Z765 but the best appraisal practice is to do so because it is a good and fair standard.
- Finished basements: Which would you pay more for; a walk-out basement with a floor that is level with your backyard, full size doors and windows, glass sliders, abundant natural light and ventilation, or a dark walk-up basement with tiny windows? the value per square foot of a basement varies WIDELY due to type of construction. This is why it is not part of GLA and absolutely must be broken out, as is the case in the updated FNMA forms which now distinguish between walk-out, walk-up and interior only(finally).
Tags: FSBO, List my House, house value, Real Estate Value, Newton real estate appraiser, Newton real estate appraisal, Newton appraiser, Newton appraisal, Boston appraisal, Boston appraiser, MA appraiser
If you found this article helpful or informative, I would be grateful if you would like and share it with others. And please let me know if there is any real estate or appraisal related topics that you are interested in. – Adam@AladdinAppraisal.com