I am very fortunate to have this gorgeous home to look at everyday as it is near my office building. It took a couple of years to build and as you can see has substantial living area.
As a certified appraiser I am often asked what will contribute to living area on a home as it is often confusing and a source for liability. Some key tips on how living area is defined and view by an appraiser.
The area must be finished and is vented for heating and cooling. (At least in Texas we have weather extremes so our homes would require both types of air system capability). Venting can range from HVAC systems to window units, wall furnaces, and older homes with room heaters.
The finish quality of an addition must be consistent with the finish quality of the home. If it is not, there usually will be some contributory value assigned the additional area on the appraisal report.
Does the area functionally flow, make sense? For example if there are 3 stories, is there a bathroom on the third floor? Do you have to walk through a bedroom to get to another bedroom? This is called functional obsolescence.
Garage conversions- finish must be consistent, door mechanism removed and outside finished with good quality to improvement, functional flow - do you have to walk through the utility room to get to it? Many times the lack of a garage will be a negative that will offset the positive for the conversion.
Living area - excludes: porches, patios, garages.
Slope of ceiling - if a ceiling height is below 7 feet it generally is not included in living area but may be given value for storage. If the room is in an attic converted space, the appraiser will stop the measuring where the slope falls below standard height.
Stairs - usually will remove the open area but a portion will receive credit. Special stair finishes may be given extra value in an appraisal valuation under quality.
Ansi Standards is the recognized standard from which most appraisal organizations adhere for their uniform guideline for their appraiser members. When a question arises regarding the square footage of a home it is best to reference credible sources such as the builder plans, property tax records, appraiser's measurement and to retain this information in file for record. Do not do the math yourself .. if a home has a garage conversion do not add the size of the garage plus the size reported as the main improvement to equal the new square footage. Rely on an appraiser's measurements not yours as this converted area may be viewed differently from living area contribution. That is how lawsuits end up in the court system.
Although some aspects of a home may not be included in living area they may have a nice contribution to value. Such as the above photograph .. the majestic balconies .. although they are not included in living area they certainly cost a lot to build and do contribute value. That would be considered as an adjustment on a report to the comparable properties.
As a buyer's representative you want to make sure the square footage reflected is accurate. If you see a source as "Other" or "Owner" seek documentation of the living area size.
Living Area - best have it accurate and be familiar with what counts and does not. This will make you even more valuable as a professional representing your client.