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How is Square Footage Calculated?

by | Jun 17, 2022

Square footage is not what you think.
You may think that square footage is an objective fact. However, in real estate, square footage is anything but objective. In this article, we will define what can and can’t be expected regarding square footage in real estate, and we will present the two most reliable ways to calculate square footage.

Appraisers will likely reach different square footage conclusions about the same house.
Even if you have an appraisal done, your appraiser may use a different method for square footage calculation. There are no federally mandated standards for measuring square footage in residential real estate; if you have four appraisals performed on your house, all four appraisers will likely arrive at different square footage conclusions. However, these appraisals will likely be in the same relative ballpark, since most appraisers are required to follow certain methods based on their trade associations and/or state laws. For example, a widely used set of standards developed by the American National Standards Institute (ANSI) is a fairly reliable and consistent method used across numerous appraisal organizations. Thus, an appraisal is one of the most accurate ways to calculate square footage, even though there will be slight differences between how various appraisers calculate the same property.

How can something that seems like an objective number be so complicated? One example that helps illuminate this conundrum involves how the square footage of a stairway with a foyer might be calculated. Often, the area that is open on the second floor of the foyer will not be added into the square footage of the second floor. This is because the open space does not have a walkable surface; it only provides the ability to see into the floor below. However, the stairway that leads up to the foyer often will be included in both the upstairs and the downstairs square footage calculations separately, since it is a walkable surface that is partially on both floors. Another complexity involves how finished and unfinished basements are defined, and whether they are calculated into the square footage of the building. There are countless other complexities like these that sometimes make square footage calculation more creative than objective.

Brokers who calculate square footage will be sued.
A significant problem with square footage comparisons is that real estate listings can generally list whatever square footage the seller wants to, not what the broker thinks the square footage should be. This may seem strange, but there is a very good reason for this; real estate brokers will likely be sued if the buyer disagrees with a broker’s calculations. Real estate brokers are not trained to calculate square footage, so they would be going outside the limits of their license by doing so. The same could be said of a real estate broker who gives out legal advice; this broker would likely be practicing law without a license, and could be sued for that as well.

Brokers are encouraged not to calculate square footage by liability laws. Thus, brokers are careful to state that the square footage information was provided by the seller, which means that the broker does not face legal responsibility for this information. If a broker were to contradict the information provided by the seller, they would take on massive liability. As a result, a broker is the last person you should consult to verify square footage, since they will likely say that you should hire a professional to determine it for you.

Assessor’s vs. appraiser’s calculations
An assessor map is made up of layers upon layers of assessments performed under different standards and possibly decades apart. Assessor maps may have square footage calculations based on outdated appraisal standards, based on the building’s footprint only, based on an assessment done fifty years ago, or based on a property before the basement was finished, for example. This is why an appraisal and an assessor’s map may list dramatically different square footage calculations.

Most accurate; least public
The appraisal will be the most current and comparable calculation, but it is also the least public, since appraisals are usually not required to be reported to any public authority or shared online. A seller’s quote of their own property’s square footage may or may not have been based on a recent appraisal. It also could be based on the seller’s own measurements, or their own feelings. Most real estate contracts contain phrases like “buyer to perform due diligence,” which is another way of saying that the buyer is responsible for verifying information like square footage.

The most accurate method might not be an appraisal.
The most accurate method of calculating square footage might be your own calculations. This is because you know what your spatial requirements are, and can rely on your own measurements. For example, a 1500 square foot condominium with 12 foot ceilings and an amazing view may feel much larger to you than a 2000 square foot ranch house with 7 foot ceilings and a few small windows blocked by trees.

When looking at real estate listings, take the square footage listed as a very loose figure. Remember that you may be a much better source of the square footage information you need than anyone else in the real estate profession.

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