Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California
Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California

Saturday, June 26, 2021

How real estate appraisers measure homes for real estate appraisals - by Mary Cummins, Los Angeles, California

How a real estate appraiser measures a home, house, measure, mary cummins, real estate appraiser, real estate appraisal, los angeles, california, marycummins.com, marycummins
How a real estate appraiser measures a home, house, measure, mary cummins, real estate appraiser, real estate appraisal, los angeles, california, marycummins.com, marycummins


Real estate appraisers measure homes using the ANSI method. ANSI stands for the American National Standard Institute. It is a square footage method for calculating the gross living area of a residential property. The standard is ANSI Z765-2013. It was first approved in 1996 by the American Institute of Architects, the Appraisal Foundation, the Building Owners and Managers Association, the Manufactured Housing Institute, the National Association of Realtors, Fannie Mae, Freddie Mac, HUD and others. Here is the 2020 draft though the 2013 version is approved.

Detached Single-Family Finished Square Footage

"For detached single-family houses, the finished square footage of each level is the sum of finished areas on that level measured at floor level to the exterior finished surface of the outside walls."

Legal room counts, bedrooms, bathrooms

A real estate appraisal will include the total number of rooms, bedrooms and bathrooms. An average home with a living room, dining room, kitchen, two bedrooms, one full bathroom, one half bathroom would have five rooms, two bedrooms and 1.1 bathrooms. A 3/4 bathroom which is a toilet, sink and shower is considered a full bathroom. A half bath only has a toilet and sink.

A room does not have to be divided by walls to be considered a room. An example would be a large open living/dining area. It would be considered a living room and a dining room. "Bathrooms, laundry rooms, sun rooms, closets, storage rooms and entries are not usually considered rooms." 

A bedroom generally has a closet. If it's an older home, it may have been built without a closet. It could still be considered a bedroom if it's at least minimum size and meets all other requirements for a bedroom. A legal bedroom would have its own access off a hallway or main room. The only access cannot be through another bedroom. It would most likely be considered a sitting room for the adjacent bedroom in that case. 

Openings to the Floor Below

"Openings to the floor below cannot be included in the square footage calculation. However, the area of both stair treads and landings proceeding to the floor below is included in the finished area of the floor from which the stairs descend, not to exceed the area of the opening in the floor."

Sloped ceilings

"Ceiling Height Requirements: To be included in finished square footage calculations, finished areas must have a ceiling height of at least 7 feet (2.13 meters) except under beams, ducts, and other obstructions where the height may be 6 feet 4 inches (1.93 meters); under stairs where there is no specified height requirement; or where the ceiling is sloped. If a room’s ceiling is sloped, at least one-half of the finished square footage in that room must have a vertical ceiling height of at least 7 feet (2.13 meters); no portion of the finished area that has a height of less than 5 feet (1.52 meters) may be included in finished square footage." See graphic.

Attics, lofts

"Lofts and finished attics must be accessible by a conventional stairway or other access to be counted. If you can only reach the loft by climbing a ladder or very steep small stairs, it’s not part of the  finished floor area regardless of the ceiling height." The loft or attic must be a legal conversion completed with a building permit and included in the tax assessment roll to be included in the gross living area. It must be finished with heat.

Finished Areas Connected to the House and Not Connected to the Main House

"Finished areas that are connected to the main body of the house by other finished areas such as hallways or stairways are included in the finished square footage of the floor that is at the same level. Finished areas that are not connected to the house in such a manner cannot be included in the finished square footage of any level."

A finished area that is not connected could be a separate guest house, separate Accessory Dwelling Unit ADU, separate mother in law unit or converted garage. Those areas will be measured and included in the report. They just won't be included in the gross living area of the home. 

Unfinished, Unpermitted Areas which are not included

An unfinished area would be a basement that doesn't have finished walls, ceilings or flooring. Unpermitted areas such as unpermitted garage converted to living quarters; porch, patio, balcony which was enclosed and added to a bedroom and any unpermitted addition would also not be included in the gross living area. The living area must be livable year round. A garage would be measured, included on the sketch, included in the sales grid with credit and included in the cost approach. The size of the garage just would not be included in the size of the gross living area of the home.

Finished Areas Adjacent to Unfinished Areas

"Where finished and unfinished areas are adjacent on the same level, the finished square footage is calculated by measuring to the exterior edge or unfinished surface of any interior partition between the areas."

Above- and Below-Grade Finished Areas

"The above-grade finished square footage of a house is the sum of finished areas on levels that are entirely above grade. The below-grade finished square footage of a house is the sum of finished areas on levels that are wholly or partly below grade."


The exception to the above and below grade area is multilevel homes built on a sloped lot. 

From Fannie Mae in regard to basements and multilevel homes. "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 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."

Below is a home that fits that exception which is very common here in Los Angeles, California. The middle level is at street level. The lower level is considered above grade because it's built on a sloped lot and three sides are out of ground. It is common for the area.


The above are only some areas which are not included in the gross living area of the main home. All areas will be measured, photographed, included in the report and given credit if they contribute to value. While the size of a permitted ADU would not be included in the gross living area of the main home, it would be included in the appraisal report on the line "Basement and finished rooms below grade" and given credit if it contributes to the value of the home. An ADU adds value to a home. A 100 year old unpermitted guest room that's about to fall down might be included on the same line but probably not given credit. A small old tool shed would not be included and not given credit. A large unfinished workshop would not be included in home size but would be measured and given credit if it contributes to value. 

The main purpose of using ANSI is consistency. People need to be able to compare apples with apples. If all real estate agents, developers, appraisers used ANSI and stated ANSI measurements on their reports and listings, it would make for more transparent real estate transactions. Unfortunately most living area sizes in real estate listings do not comply with ANSI. The size listed on MLS listings is generally larger than the legal gross living area. That's why they include the disclaimer on the bottom stating they don't guarantee the size or legal bed, bath count. 

References:

https://www.e-rallc.com/ANSIstandards

https://themilfordteam.com/How_to_measure_a_house.pdf

Mary Cummins of Animal Advocates is a wildlife rehabilitator licensed by the California Department of Fish and Game and the USDA. Mary Cummins is also a licensed real estate appraiser in Los Angeles, California.


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