Gross Living Area (GLA)

The below text is from the December 2012, Volume 8, Issue 12 of the Monthly Newsletter of the Georgia Real Estate Commission

Probably one of the most important elements of a home, in terms of value, is the overall living space or gross living area (GLA). It is probably one of the most misunderstood elements as well. There are a number of standards for calculating GLA but the one that is used by appraisers is the “ANSI” – American National Standard Institute.

The ANSI standards define “finished area” as “an enclosed area in a house suitable for year- round use, embodying walls, floors, and ceilings that are similar to the rest of the house.” Measurements must be taken to the nearest inch or tenth of a foot, and floor area must be reported to the nearest square foot. Garages are specifically excluded.

The way I explain it is that if you put your foot on the floor of any given level and any portion of that floor is below the grade of the ground, it is considered below grade space and CAN NOT be included in GLA. Another way to think of it is that if you could not put a door on any part of the perimeter than it is below grade space. This comes into play in parts of the country where there are homes with basements and other home styles such as split level and split foyer homes where some levels are below the grade of the ground.

The appraiser then will take the areas above grade and count the rooms. The appraiser will count the total number of rooms, then the number of bedrooms and then the number of bathrooms. The room count will only include rooms which are above grade; bedrooms and bathrooms below grade will not be included in the room count. Foyers, breakfast areas, laundry rooms and bathrooms are excluded from the total room count. So for example, we might have a typical two story traditional home. The first floor has a foyer, living room, dining room, family room, kitchen, breakfast area, laundry room and a half bathroom. The second floor might have four bedrooms and two full bathrooms. Our total room count is eight (living room, dining room, family room, kitchen and four bedrooms), our bedroom count is four and our bathroom count is two and a half (8-4-2.5).

Let’s define a bedroom before we go any further. A bedroom is a room of “adequate size” – which is defined as no less than 100 square feet. It must have a closet, a window, a door; it must be heat/cooled and finished to the same quality as the rest of the house. It must be ABOVE GRADE to be counted as a bedroom. And the most forgotten or unknown factor in defining a bedroom is that it must have ready access to a FULL bathroom. A full bathroom is one which has a shower or a tub as well as sink and toilet. Think about it, if you have a bonus room finished up over a garage; it has a closet, window, door, heated/cooled and finished to the same quality as the rest of the house but you have to go down the stairs and across the house to use the bathroom – that does not function on a long-term basis as a bedroom. Another common scenario is that you might have four “bedrooms” on the second floor of a house. Three of the bedrooms have private baths. How is someone in the fourth bedroom supposed to get to the bathroom?

If you answered “by going through one of the other bedrooms” you are incorrect. That does not function on a long-term basis as a bedroom. We would instead call it a den or office.

Probably the most common scenario is as follows: let’s take a traditional two story house. On the first floor you have a living room, dining room, kitchen, one half bathroom, laundry and a “bedroom”. The problem here is that the “bedroom” is only serviced by a half bath. Again, this does not function on a long-term basis as a bedroom. Here is where it is valuable to have an appraiser as a consultant during or prior to the construction process of a new house.

Getting back to below grade space, let me stop right here and assure you that value is given to these “below grade” spaces, they just have to be handled separately. By creating and utilizing these measuring standards, appraisers are able to accurately compare and value homes. All appraisers use the same measure standards as a basis for determining GLA, however, there may be some local exceptions so it is important to check with a local certified appraiser. One example of a local exception is in lake front or mountain home communities. The homes are built on such a slope that often living areas are built into the hill and may span three or four levels. Many times the most upper level (the only part above grade) is just the entry area and great room. Kitchens, bedrooms and other living areas are below grade. The most important thing to remember here is consistency. As long as you are consistent on how you define the space and are sure your comparables are calculated the same as your subject, you will be fine. GLA is not as much an issue in parts of the country where all the homes are built on slab.

It is critical that you recognize these factors and determine gross living area correctly. This forms the foundation for the valuation of the entire property. 
— D. Scott Murphy, SRA

D. Scott Murphy, SRA

Mr. Murphy has been appraising real estate since 1985. In 1993 he earned his SRA designation from the Appraisal Institute.

• In 1996 he established D. S. Murphy & Associates and has grown the firm to have over 70 associates – servicing Georgia, North Carolina, South Carolina, Tennessee, Florida and California.

• In 2004, Mr. Murphy was appointed by Gov Perdue to the Georgia Real Estate Appraisers Board where he is actively working to improve the laws and more closely regulate appraisers in Georgia. He has served as the Chairman of the Georgia Real Estate Appraisers Board for the past three years.

• Mr. Murphy was reappointed as Chairman of the Georgia Real Estate Appraisers Board by Governor Nathan Deal in July of 2016.

• He is an active member of the Appraisal Institute, the National Associates of Realtors, the Northeast Metro Atlanta Board of Realtors, Georgia Real Estate Fraud Prevention and Awareness Coalition.