What is Gross Living Area (GLA)?

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Dave Towne

Certified Residential RE Appraiser at Towne Appraisals
AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003.
Dave Towne on e-AppraisersDirectory.com
Dave Towne

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What is Gross Living Area and What Does it Include

What is Gross Living Area and What Does it Include?

Appraisers,

There are certain properties where aspects of Gross Living Area (GLA) might not be obvious. It’s more confusing when the selling real estate agents lump all “living space” together, because that’s what they are selling, or when the county assessor includes basements with upper level areas.

These include homes with a detached ADU, additional rec room or sleeping space above a garage, additional living space with roof attached to the primary dwelling via covered breezeway, basement living spaces with separate entry, etc.

Fannie Mae has a giant book called the Seller’s Guide, a portion of which describes how they expect living spaces to be annotated, as do Freddie Mac, FHA, VA, USDA, etc.

For this discussion, here is the FNMA guideline:

B4-1.3-05. Sellers guide.

Gross Living Area

The most common comparison for one-unit properties, including units in PUD, condo, or co-op projects, is above-grade gross living area. The appraiser must be consistent when he or she calculates and reports the finished above-grade room count and the square feet of gross living area that is above-grade. The need for consistency also applies from report to report. For example, when using the same transaction as a comparable sale in multiple reports, the room count and gross living area should not change.

When calculating gross living area

  • The appraiser should use the exterior building dimensions per floor to calculate the above-grade gross living area of a property. (measuring process also applies to below-grade area)
  • For units in condo or co-op projects, the appraiser should use interior perimeter unit dimensions to calculate the gross living area.
  • Garages and basements, including those that are partially above-grade, must not be included in the above-grade room count. (See ‘exception’ below)

See ‘exception’ below  – only finished above-grade areas can be used in calculating and reporting of above-grade room count and square footage for the gross living area. 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.

Rooms that are not included in the above-grade room count may add substantially to the value of a property, particularly when the quality of the finish is high. For that reason, the appraiser should report the basement or other partially below-grade areas separately and make appropriate adjustments for them on the Basement & Finished Rooms Below-Grade line in the Sales Comparison Approach adjustment grid.

For consistency in the sales comparison analysis, the appraiser should compare above-grade areas to above-grade areas and below-grade areas to below-grade areas.

The EXCEPTION….Pay attention to this >>> The appraiser may need to deviate from this approach if the style of the subject property or any of the comparables does not lend itself to such comparisons. For example, a property built into the side of a hill where the lower level is significantly out of ground, the interior finish is equal throughout the house, and the flow and function of the layout is accepted by the local market, may require the gross living area to include both levels. However, in such instances, the appraiser must be consistent throughout the appraisal in his or her analysis and explain the reason for the deviation, clearly describing the comparisons that were made. (This means you CAN include below grade living space and room counts with the above grade GLA & room counts as necessary. I have done so numerous times with no problems. But doing so requires an explanation in the report, and treating all properties the same.)

Separate ADU’s: should not be included in the home’s GLA

Living space(s) not directly connected to the home’s primary heated envelope: should not be included in the home’s GLA – such as are sometimes found above garages accessed via a built stair (not the pull-down type) from within the unheated garage, or in below main floor locations accessed from a separate exterior entry not connected to the main floor

Bonus rooms (typically above garage) within heated envelope of dwelling: included in GLA

Living space(s) in outbuildings: should not be included in the home’s GLA

Living space(s) in converted garage space: this is probably the hardest to figure out. Some jurisdictions do not consider these areas to be ‘living space’ unless “permitted” when constructed; others don’t care. Some lenders want to be sure about “permitting” and demand rip out (or no value given) if not, and others don’t care. An issue of concern is dwelling insurance liability; without a permit in place the insurer may not replace that space as it was before the damage, or if it can be proven the damage started within unpermitted space, there may not be any insurance coverage to the entire structure. Secondly, proper code compliant egress may not be in place in these extra garage areas. The appraiser probably should check for jurisdiction permits. Converted garages into living space are not always apparent from the exterior. Appraisers need to be very careful with this type of situation and probably should communicate with the client up front before proceeding with report write-up and completion – especially when the finish appears to be as good as the home interior.

Upper floor areas with space ‘open to below’: if you can’t walk on it, it’s not GLA! (angel wings don’t count!)

Interior stairs between levels: are counted in the GLA to the floor from which they originate (per ANSI Z765-2003).

  • Stair area between main and second floor: GLA applies to both floors for that space (& floors 2 & 3, etc.)
  • Stair area from main level to basement: living space applies to basement level
    NOTE: architects and building designers do not have a consistent way to calculate stair areas. I’ve seen many variations.
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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16 Responses

  1. Really appropriate and well written article. Timely.

    I recently reviewed a case referred to the American Guild of Appraisers (AGA) involving one of the types of exclusions noted in the article. While the net size difference was not huge (about 150+- sf) and the value conclusion was not significantly affected, it did provide a vehicle for that appraisers state regulatory board to really come down hard. Simple error turned into a license threatening case by a state apparently trying to demonstrate its new found muscle, after years of not doing anything.

    I doubt many underwriters or more likely, their review ‘clerks’ catch the exceptions part of your explanation.

    Readers should also assure themselves as to the specifics for VA; FHA, Freddie Loans.

    Your site and its useful news is especially helpful to appraisers that may not be members of professional peer appraisal groups. They can also find helpful advice one on one though the American Guild of Appraisers, OPEIU, AFL-CIO. Link through http://www.appraisersguild.org

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  2. bubba jay bubba jay says:

    awesome article, and thank you Dave!

    its nice to see an informative article for a change, instead of being constantly reminded of all the doom and gloom we face on a daily basis. i always enjoy learning something, and i did take away a piece or two from this article, however the majority of it i already knew. articles like this serve well to educate and remind everyone, and its always greatly appreciated and a brief breath of fresh air.

    the bleeding however, continues . . . . .

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  3. Avatar Randall R. Davis, SRPA, SRA says:

    ADU? Had to look that up (Accessory Dwelling Unit) as I have never heard of that term in our market area. It’s not that we are slow here in Michigan but when did cell phones loose their antennas?  Anyone have an eight track player they want to sell?

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  4. Avatar HeNalu says:

    Recently had a two story with area open to below of 200sf. Builder sold same model  homes with open area and assessor recorded them as 2,000sqft including the “open” area. (If you can’t walk on it it ain’t GLA).  On site measurement indicated subject GLA to be 1,800sf without open area included and 2,000with added loft.  Subject had added a loft area over the open space (also 1 recently sold model match did the same). Realtor for the sold model just added the 200sf to the builders/assessors figures and voila! 2,200sf which now became the new norm for this model.  I explained to borrower for my subject that he had bought “open space” and by adding the loft only got value added for utility/room count since now he had his 2,000sf that the builder sold him. As far as comparison to the other models available the above conditions remained constant across the adjustment grid.

    Borrower complained, another appraiser agreed with homeowner and “target” value was achieved. I lost the account. No good deed or amount of accuracy goes unpunished. Good article though helps to confirm that we can be conducting our business in a professional manner.

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    • Retired Appraiser Retired Appraiser says:

      The profession is full of weasels and rodents; who typically win. Never beat yourself up over sticking to a higher standard of ethics. Your family will end up eating far more beans and rice than the weasels and rodents but in the end you know you did the right thing. I suggest finding a profession that values quality and ethics and pays you for the effort HeNalu.

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  5. Avatar Greg says:

    For Gross Living Area you are saying that a first and second floor stair is counted for both floors. But stairwells that extend above with no connecting treads are not part of upper floor GLA.  Just read the reference. The ANSI Z765-2003 is important doc for all to understand. Gross Living Area not to be confused with Gross Leasable Area (GLA)….. used in commercial construction/real estate leasing.   

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  6. Avatar Ray says:

    My name is Ray,

    I’m a home owner that recently had an appraisal done. I have a single story house it has 5 bedrooms 4 bath, 3 rooms and 2 baths are separated by a breezeway the appraiser said the 3 rooms are not part of the GLA. The rooms have their own heat and air covered by the same roof. I’m trying to find in the fnma guidelines where it states that this would it be considered  an adu. Any help would be helpful

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    • Mike Ford Mike Ford says:

      Hello Ray, The article above is from the FNMA sellers Guide.

      Living space(s) not directly connected to the home’s primary heated envelope;

      Living space(s) in outbuildings: should not be included in the home’s GLA

      You didn’t indicate whether the breezeway was fully enclosed, and/or permitted living area heated  by the same source as the main living area; whether it is heated at all, or open to the weather aside from it’s roof.

      Are ALL five of your bedrooms permitted as bedrooms? You don’t disclose what the separate three rooms are comprised of. Is one of them a second kitchen?

      Whether its GLA (primary) or an ADU area or simply ‘other’ permitted area doesn’t mean it is or is not considered to contribute equally in your local market. Respectfully I think you are looking for universal one size fits all type labels for areas that may vary with local custom. It seems unlikely the appraiser would not have accounted for that area in his or her report whether in GLA or as ‘other’.

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      • Avatar Marilyn says:

        Hi Mike. I have a similar situation. Purchasing a home with a separate bedroom, full bath and kitchenette are separated by a breezeway. It’s 407 sq ft of Living space. The two areas share a roof and ac/heat (if we ever use it in Florida). The appraiser is not counting the structure in the appraisal and we are in deep trouble here. The property under appraised by $80k (if the 407 sq fit was taken into account, it would have appraised at about the sale price). I understand appraisals are not one size fits all but if I’m paying taxes on 2891 and regularly using 2891 sq ft, why is the appraiser omitting the 407 sq footage? Is there any way to respectfully dispute the appraiser’s findings? And why is it that some appraisers will include all courtyard home sq footage and some don’t? Seems like a nightmare to appraisers and sellers/buyers alike. Any help would be appreciated.

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        • Breezeways are not typically considered living space. Of course, the devil is always in the details. I didn’t see it so I don’t know if the term “breezeway’ is an enclosed hallway type addition with an entry door at both ends (not really living space); or whether its really more of a 20 x 20+- room connector. Is it a slab built connector attached to a raised foundation sfr on one end? Is the equality of construction the same or better than the original house it’s attached to?

          At $80,000 ‘off’ on the price that breezeway would have to be something really special to be worth $196 a sf (adjustment). I’m not going to second guess an appraisal I have not seen.

          It’s very possible the appraiser is saying “contract can be written for any cash price the buyer and seller want; but if they want to finance this house they need to know it is worth $80,000 less based on current appraisal standards and market value definitions.”

          You can always hire a separate appraiser to do a formal field review of the first appraisal. Cost should be from around $450- $750 depending on property complexity. A good reviewer is not likely to be at the lower end of the range (in my opinion). Disputing the results without a professionally prepared review in hand is not going to likely prevail. Getting a cheap desk review isn’t much value either. Why not ask the listing and selling agent to try to support their own listing? Where is their CMA. IF they never did one before listing the property, that may tell you something. Good luck.

          IF the review and original appraisal both say MV is $80k less than you believe, then respectfully you are likely incorrect; & the seller is the one that needs to rethink their position. If the first appraisal is significantly in error then you have a right to insist that a valid appraisal be done – you paid the AMC for one.

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  7. Avatar Marilyn says:

    I’ve attached a photo of the space from the county appraiser’s website. Maybe this will help with some of the questions.

    The seller purchased the property 4 years ago and did not run across this issue so I’m still confused how it sometimes is included and sometimes is not. The 407 sq ft shares all the home’s utilities and the condition is equal to the condition of the home, fully finished space. How is it that the county appraiser’s site and MLS list the property as 2891 sq ft? I’m paying taxes on 2891, cooling 2891 sq ft, maintaining regularly 2891 sq ft, so when it really matters in the appraisal, it doesn’t count? If that’s the case then it should be reflected everywhere. MLS should not list it as 4/3.1, but as 3/2. It would be listed at 2484 sq ft not 2891. I have trouble with the fact that the appraiser can pick and choose, and I don’t claim to know anything about appraising, I’m just taking a common sensical approach. The appraiser valued the property at $258/sq ft. At that value, we’re at $650k. If he included the 407 sq ft he left out, it make a huge difference in value. Even if there were a middle ground that made sense I could ask the seller to entertain it but why would the seller give up $80k if the next buyer’s appraiser would include it in the appraisal?

    CMA was done by the realtor and it came in a couple thousand under sale price. That was the first thing she did.

    If you’d like to see photos of the property here’s the link: https://bit.ly/2YAm8Ux.

    Maybe that would help.

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    • Marylyn I still don’t see the appraiser’s measurements tied to a specific picture so I can’t answer your question. Interior photos all look great and quality appears to be consistent.

      There are a number of possibilities: The appraiser COULD honestly just be wrong. Your other data on size could be wrong. MLS is notoriously unreliable for size reporting. Zillow? Why are you wasting your time (or anyone else’s citing one of the least reliable data services in America?).

      Local custom may also enter into it. In California, we used to have so-called Florida rooms or sunrooms that ranged from clearly identifiable screened in areas to pretty high-end glass-walled additions. They used to be categorically outside GLA. Now it is more quality related and subjective. What does the Certificate of Occupancy for your house show? Building permits?

      Again, the only thing I can suggest to you is to obtain a competent review appraisal and require specific attention to measuring size. Let the reviewer or new comparative value appraiser know exactly what the issue is. As you describe it, it appears the size could be understated but I’m 3,200 miles away so how could I tell?

      It MAY something as simple as no visible air conditioning or heating vent in the specific room. “Shares all utilities” is just too ambiguous”. We can play guessing games forever but until you verify specifically WHY the 407sf is excluded then that’s all we are doing…guessing. Get the lender’s permission for the appraiser to discuss the specifics with you, and then ask the appraiser to explain because you think he MAY have made a reportable signficant error that had a substantive impact on the conclusions. He’ll know what that means.

      If I had a 407 sf error alleged I’d be happy to have the opportunity to correct it…or the reassurance that it was not an error, and an opportunity to attempt to explain the reasoning to you.

      For what it’s worth we don’t simply “get to pick and choose” as you state. We are OBLIGATED to use the information source that we deem to be most credible and reliable. If your state (or County) has a reputation for taxing at builders stated SF instead of per plans and ANSI measurements, then the appraiser would NOT deem them to be credible.

      Is a 407 sf error probable? Who knows. I can only say it is possible. Larger, more articulated homes like yours can have blind walls and other difficult access runs where measuring is hindered. Sometimes it is an owner himself that hinders accuracy. (I NEVER measure inside first unless an owner insists to the point where I have to consider withdrawing from assignment-some owners that unthinkingly JUST WATERED their lawn before I get there aren’t crazy about me walking outside and then inside). It’s very difficult to use interior measurements on larger houses like yours.

      Bottom line if the source of discrepancy is not positively confirmed, then ask if he will remeasure it. If source IS known, then call a few local appraisers up and ASK them how they would treat it.

      Nationally renowned appraisal expert & educator Hamp Thomas wrote a great article in Appraisers blogs on this topic. Here is the link to the article and to the standards discussed in it. http://appraisersblogs.com/appraisal/two-measurement-standards-ansi-vs-ams/

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What is Gross Living Area (GLA)?

by Dave Towne time to read: 4 min