July 24, 2012
by Henry Savage
Question: Is there a standard formula to calculate a home’s square footage? I have seen different publications with different square footage for the same house. For example, the county land records will say a house has 3,000 square feet, but a sales brochure will say the same house has 3,500 square feet. Are finished basements allowed in a calculation? What about hallways? I don’t know what or who to believe. It seems misleading.
Answer: You have asked a very good question. I doubt if anyone is purposely trying to mislead the public, but it’s true that not everyone in the real estate business calculates square footage the same way. In fact, it may be different from one geographic area to the next. I’m from the Washington, DC area, so I’ll share with you what I know about how it’s done here.
The square footage listed in the city and county records for condominium units are typically not questioned. These numbers are taken from the original condominium documents and are generally accurate. Unlike detached homes, square footage is less likely to change on a condominium as a result of additions and improvements.
For attached and detached single family homes, there are different ways to calculate square footage.
Most real estate appraisers measure the exterior of the home to calculate the gross living area. For example, a two-story home that measures 25 feet by 25 feet would have 625 square feet on each floor, so the appraiser would say the house contains 1,250 square feet. Since he is measuring from the exterior, the calculation includes hallways, stairwells, closets and wall space.
The appraiser will also consider the size of the basement and determine how much of the basement has been finished as living area. Instead of totaling the square footage of a basement’s living area, he will make value adjustments based on other comparable homes. For example, a home with a full finished basement that includes a den, bathroom and bedroom might be credited $15,000 or $20,000 in value compared to a similar house with an unfinished basement.
In some cases, even if the lowest level is completely above grade, an appraiser may treat it as a basement. Consider an attached townhouse that has a lower level used as a garage and a den or mud room. An appraiser might consider such a room as a basement.
It gets more complicated. What if the house in our example has a vaulted ceiling in the family room with a second story balcony? This would clearly result in the second floor having less than 625 square feet of actual floor area. Most appraisers won’t subtract the space left out of the second floor to make room for the vaulted ceilings. Why? Because such a floor plan often enhances the market value of the home because it’s a popular feature to have. Remember that an appraiser’s job is to determine the market value of the home. The total size of the living area is only part of the equation. Imagine a 3,000 square foot house that contains 20 small rooms each consisting of 150 square feet. Such a build out would not be very popular for a typical family.
Many real estate agents and builders will include all finished “walkable” areas when totaling the square feet of a house. It’s certainly not misleading. A lot of prospective home buyers would want to know the total living area, regardless of whether some of it is below grade.
Other real estate agents will use the square footage that’s listed in the county tax records in their marketing materials. Unfortunately, this information is often incorrect, especially with older homes. Over time, basements get finished and additions are constructed, increasing the chances that tax records will be outdated and inaccurate. It’s for this reason that some agents simply choose to omit the square footage in the listing report. You’ve probably seen a disclaimer similar to this on a house listing: “Information deemed reliable but not guaranteed. Buyer to verify square footage.”
The bottom line? Calculating the square footage of a home is more of opinion than exact science. If you’re interested in buying a particular house and want to know the size expressed in square feet, my advice would be to make an appointment to visit the home and bring your tape measure, pen, paper and calculator.