We often have client’s ask: So, what counts as gross living area? They ask about heated vs. non-heated spaces, finished and unfinished basements and even porch and patio areas. What is the appraiser actually considering when they talk about gross living area square feet?
Let’s start with defining gross living area, commonly referred to as GLA.
- Appraiser measures using the exterior building dimensions per floor.
- At times upper level is measured from interior.
- Enclosed porches and finished above grade spaces can be used if:
- permanent heat source
- finished in same quality
- permit obtained
Let’s start with defining the 2 areas.
“Above grade area” refers to that finished part of the dwelling that is above the ground line, or grade of the earth. Think of the first floor and any floors above.
o “above grade” = finished part of dwelling above ground line
o “below grade” = area of dwelling that is all or partly below ground line
o “above grade”/”below grade” are valued and reported separately
Gross Living area does not include “below grade” area
Exception: What’s typical in the market?
“Below grade area” is usually defined as the area that is ALL or PARTLY below that ground line. Think basement space. Even if that space has windows it is considered below-grade.
Above-grade and Below-grade are reported as distinct areas and the appraiser will report and value them separately on the sales comparison grid. Only finished above-grade areas can be used in calculating and reporting above-grade room count and GLA. Fannie Mae considers a level to be below-grade if any portion of it is below-grade, regardless of the quality of its finish or the window area of any room. Therefore, a walk-out basement with finished rooms would not be included in the above-grade room count. This would be given value as a finished basement.