My New Outside Blog: How Does An Appraiser Measure This?

How Does An Appraiser Measure This?

 

Home in Kings Lake, McKinney, Texas 

I am very fortunate to have this gorgeous home to look at everyday as it is near my office building.  It took a couple of years to build and as you can see has substantial living area. 

As a certified appraiser I am often asked what will contribute to living area on a home as it is often confusing and a source for liability.  Some key tips on how living area is defined and view by an appraiser.

  • The area must be finished and is vented for heating and cooling.  (At least in Texas we have weather extremes so our homes would require both types of air system capability).  Venting can range from HVAC systems to window units, wall furnaces,  and older homes with room heaters.
  • The finish quality of an addition must be consistent with the finish quality of the home.  If it is not, there usually will be some contributory value assigned the additional area on the appraisal report. 
  • Does the area functionally flow, make sense?  For example if there are 3 stories, is there a bathroom on the third floor?  Do you have to walk through a bedroom to get to another bedroom?  This is called functional obsolescence. 
  • Garage conversions- finish must be consistent, door mechanism removed and outside finished with good quality to improvement, functional flow - do you have to walk through the utility room to get to it?  Many times the lack of a garage will be a negative that will offset the positive for the conversion.
  • Living area - excludes:  porches, patios, garages.
  • Slope of ceiling - if a ceiling height is below 7 feet it generally is not included in living area but may be given value for storage.  If the room is in an attic converted space, the appraiser will stop the measuring where the slope falls below standard height.
  • Stairs - usually will remove the open area but a portion will receive credit.  Special stair finishes may be given extra value in an appraisal valuation under quality.

Ansi Standards is the recognized standard from which most appraisal organizations adhere for their uniform guideline for their appraiser members.  When a question arises regarding the square footage of a home it is best to reference credible sources such as the builder plans, property tax records, appraiser's measurement and to retain this information in file for record.  Do not do the math yourself .. if a home has a garage conversion do not add the size of the garage plus the size reported as the main improvement to equal the new square footage.  Rely on an appraiser's measurements not yours as this converted area may be viewed differently from living area contribution.  That is how lawsuits end up in the court system.

Although some aspects of a home may not be included in living area they may have a nice contribution to value.  Such as the above photograph .. the majestic balconies .. although they are not included in living area they certainly cost a lot to build and do contribute value.  That would be considered as an adjustment on a report to the comparable properties. 

As a buyer's representative you want to make sure the square footage reflected is accurate.  If you see a source as "Other" or "Owner" seek documentation of the living area size.

Living Area - best have it accurate and be familiar with what counts and does not.  This will make you even more valuable as a professional representing your client.

Comment balloon 9 commentsConnie Goodrich • February 21 2011 05:30PM

Comments

Hi Connie, great post and explanation of heated square feet and what counts.  Wow...now you could measure that house and I would have to hire you to measure that house.  It is huge!

Posted by Judith Parker, CRS, GRI, CMRS, Charlotte, NC (ProStead Realty) over 8 years ago

Hi Connie,  Very nicely explained.  I get asked about those things all the time.  "The appraiser didn't measure right - He didn't count my utility room or my basement!"  It can be a struggle sometimes to convince sellers of what constitutes living space.

Posted by Susan Neal, Fair Oaks CA & Sacramento Area Real Estate Broker (RE/MAX Gold, Fair Oaks) over 8 years ago

Connie, excellent post on living space; my understanding is that the living area can generate the most complaints/concerns for agents if not properly reported (although I doubt anyone ever complained of too much).

Posted by Teral McDowell (Referral Patners LLC) over 8 years ago

Hi Connie:

Great information and clarification on square footage.

That is some awesome home, my goodness, what's the square footage on that one??

 

Posted by Toula Rosebrock, Broker/Sales Associate, Realtor, Lacey Township, (Diane Turton, Realtors, Forked River, NJ) over 8 years ago

Judith - yes this is a huge home and it is in an exclusive gated community near my office.  I would be out there all day on this I am afraid if I had to measure.  Glad you found the post informative.  Thanks as always for your kind words and visit!

Susan - yes sellers don't understand sometimes what living area actually incorporates.  The oversight I generally see from agents is the failure to give it credit for value when there should be some if it is not counted in living area.

Teral- agents do field those concerns because many are relying on a price per square foot and every foot counts!  Now if they used a better method with comparable sales then this would be a minor issue.

Toula - not sure what the size of this home is .. I think I have heard about 12,000 sq ft.  It is owned by a chain owner for a plumbing franchise.  Guess I don't need to interject ... successful plumbing franchise.  Glad you enjoyed the information and thanks, as always for your visit!!

Posted by Connie Goodrich, CRS ABR (McKinney Realtor)Texas (Keller Williams Realty) over 8 years ago

Connie - that house always takes my breath away whenever I go running by it. But while gawking at it, I am simultaneously thinking "wow - I bet it takes a LONG time to clean that!" :)

Posted by Kim Dean, d + b real estate, McKinney, TX REALTOR Broker/Own (www.RealFamilyRealEstate.com) over 8 years ago

For those interested in the full definitions, you can find a link to ANSI standards (ANSI Z765-2003) below:

http://www.sira.org/pdf/ansi20standards%20z765_2003.pdf

Posted by Jesse Skolkin (Independent New York State Certified Real Estate Appraiser) over 8 years ago

Great post & info.  Sq Ft livable can, as you say sometimes be difficult.  In my area, people sometimes put on additions that are of a lower quality construction than the rest of the house.  For instance, the house may be of good quality, but the addition may be only avg or fair quality.  It may meet all livable standards, being heated & cooled, ceiling heights etc, but contribute less per sq ft than the rest of the house.  So it would not be correct to add it in with the rest of the main house sq ft.  It then must be analyzed separately, which can be difficult at times.

Those large ones like in your picture are a real challenge & very time consuming to measure. A statement usually has to be made about the approx. results being believed to be reasonable, but the appraiser is not an engineer or architect, etc. 

Another acceptable way to deal with these very large homes is to get a copy of the orig blue prints to go from, do some verification measurements & conclude that the blue prints are deemed reliable, if indeed they appear to be. This can save a lot of time, & reduce liability to some degree.

Posted by Craig Chapman, The Value Guy (Call Realty / Access Appraisals) over 8 years ago

Correct GLA in listings is one of the things that drives me crazy.  Why do some realtors include the finished basement in the GLA and others don't?  I know its probably to make the house sound larger than it actually is.  In our area many split levels are listed with finished basement in the gla so when I look for comps on say an 1100 sf split some of thebest comps are listed as 15oo splits because the basement is included.  Other times it is actually 1500 sf and there is an addition off the rear.  It would be nice if there was some standard and it wasn't just a small comment that the basement was included.  It would make searching for similar homes easier for everyone.

Posted by Michael McGovern (Key Advantage Realty) over 8 years ago

Participate