Over the years the residential real estate term Gross Living Area (GLA) has come to mean different things to different people. Some folks would say that a “daylight” or walk-out basement qualifies as above grade and therefore should be included in the GLA of the property. Others might argue that the lower floor of a split-level home is above grade. To settle this dispute, and get everyone on the same page, we will reference the Fannie Mae Selling Guide (current version: 12/01/10).
The Fannie Mae Selling Guide (B4-1.4-14, Appraisal Report Review: Layout, Floor Plans,and Gross Building and Living Areas) states the following:
A level is considered below-grade if any portion of it is below-grade—regardless of the qualityof its finish or the window area of any room. A walk-out basement with finished rooms would not be included in the above-grade room count. For units in condo or co-op projects, the appraiser must use interior perimeter unit dimensions to calculate the gross living area. In all other instances, the appraiser must use the exterior building dimensions per floor to calculate the above-grade gross living area of a property. The following must be observed when calculating and reporting above-grade room count and square footage for the gross living area:
• 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.
• Garages and basements, including those that are partially above-grade, must not be included inthe above-grade room count.
These are the guidelines that InsideValuation and our customers reference when reviewing properties. We hope this helps clear things up!
Until next time, take care!