D. Scott Murphy, SRA, an appraiser on the VMG panel and a member of the Georgia Real Estate Appraisers Board has written an article explaining the requirements for gross living area (GLA) per the American National Standard Institute (ANSI). Scott discusses how GLA is “one of the most important elements of a home… [and] one of the most misunderstood elements as well.”
In order to correctly complete an appraisal, an appraiser must understand gross living area. Lenders must also understand this information in order to overcome obstacles with appraisal reports.
There are a few things you should consider when tackling the idea of gross living area.
1. Know what is considered valid square footage.
It is common for the owner of a property to call to discuss how the appraiser “mis-measured” their home as they have a larger home with more bedrooms and baths. After discussion, it becomes clear that the owner is considering their basement or terrace as gross living area.
Basements or “terrace levels” are not typically counted in the gross living area, based on there being a below grade per the standard of ANSI.
Finished area is defined by ANSI standards as “an enclosed area in a house suitable for year-round use, embodying walls, floors, and ceilings that are similar to the rest of the house.”
2. Consider what rooms are above grade and below grade.
If the floor of any level is below the grade of the ground, it is not considered GLA and cannot be used in the room count. The appraiser will count the total number of rooms, bedrooms and bathrooms. The room count will include above grade rooms, excluding bedrooms below grade, foyers, breakfast areas, laundry rooms and bathrooms.
3. Check the requirements of a “bedroom.”
An appraiser must consider several factors before determining a room can be considered a bedroom. A bedroom must be of adequate size (100 square feet or more), have a closet, a window and a door. It must be heated/cooled and finished in the same quality as the rest of the house. It must also be above grade and have reasonable access to a full bathroom.
We appreciate Scott allowing us to share his article, Gross Living Area (GLA), which was also published by the Georgia Real Estate Appraisers Board.
By Vicky Thompson, President & CEO