Appraiser Reality Series Part IV Lets Talk Square Footage Shall We?

Square footage. Should be a pretty simple concept right? Well not really. I spend a good deal of time explaining to Realtors and to Borrowers/Homeowners how Appraisers DIFFER from Realtors when it comes to Square footage.

When Appraisers measure homes they determine GLA (gross living area) and Below Grade or (below ground) square footage and they are calculated at different per square footage rates.

IF you have a 2,000 Square foot ranch on a full finished basement with 3 beds 2 full baths on each level....Realtors will market this as a 4,000 SF home with 6 beds and 4 full baths.

Appraisers will appraise this home as a 3 bed 2 bath with 2,000 SF of GLA and another 2,000 SF of heated space in the basement/terrace level. I can't tell you how many times I get a call from the owner or Realtor upset because we missed bedrooms and baths and total square footage. I have been including a paragraph in my reports on this very issue so they know how we deal with square footage.

Even if the Terrace level is a full walk out and finished as nicely as the upper level/s, we separate this area and usually the value per square foot is lower. WHY? Because the market typically does not pay the same price for the basement area as they do for the main levels. There may be exceptions to this in certain markets where there is no difference in the market for terrace levels.

So the next time your homeowners think HEY that appraiser missed half my house in the appraisal. Look on the GRID page where we make our adjustments and also check the SKETCH PAGE and you will see all the rooms noted and there will be adjustments in the market grid page for the finished basement area.

One other thing! The COMPARABLES that we use are treated the EXACT same way, so we do compare apples to apples.

Okay my job is done here! Please pass this along to all you know because it is perhaps the most misunderstood part of the appraisal report!

More fun facts to follow in my Appraisal Reality Series.

Stay Tuned for my next BLOG on how Perceived VALUE may or may not equal MARKET VALUE.

Have a great day!

Mary Thompson

Certified Appraiser

http://www.marytappraisals.com