Living Area
Sam Schneiderman, broker owner of Greater Boston Home Team has a few things to say about how living area is calculated and advertised.
The secondary mortgage market has clear guidelines about how appraisers are required to calculate and report the "gross living area" of single families. The rules are clear; any finished areas that are "below grade" are not supposed to be included in the gross living area of the house. That means that if the floor of a finished basement or lower level is not level with or above the land outside of it, its "living area" should not be included with the rest of the home's above grade living area.
Below grade living area is still considered when appraising single families, however, it is included and valued as a separate category of living space in the appraisal report. Presumably, that is because below grade living area is valued differently than above grade living area.
Despite this standard that is used to estimate the value for financing purposes, real estate agents and sellers often want to include the entire total of the below grade living area with the above grade living area when they market a home. That way, they can attract buyers looking for larger homes and be able to justify a higher price. To accommodate this way of presenting the square footage of homes, the local Multiple Listing Service, MLS-PIN, has the following data fields available for agents to enter the square footage of a single family:
Approx. Living Area
Living Area Includes
Living Area Source
Living Area Disclosures
When viewers see listings on MLS, they see that information. When viewers see listings on other web sites, not all of those data fields appear.
PERSPECTIVE:
To confirm what size a house really is (and possibly avoid overpaying for it) you need to do a bit of discovery and math. When comparing the home to other homes, you also need to determine the real living area for those homes, too. (The better buyer’s agents typically do this for their clients before providing their value estimate.) It helps to view assessor’s data to see how the municipality values the property and reconcile that data with the MLS data. If the assessor’s data shows different square footage than the listing that could be a clue that the living area is being over-stated or permits may not have been obtained for any space that was converted and/or added to the finished living area.
