How Real Estate Size Can Confuse You
When looking for a home to buy, one of the most important factors to consider is its square footage . It’s not just about measuring the size of the home you’re buying (especially the size of the rooms themselves—a three-bedroom home that’s 2,000 square feet will be very different from a three-bedroom home that’s 1,200 square feet). Price per square foot is also a value metric used when considering comparable homes to determine your offer. If a home on the next block is selling for $1,000 per square foot, you can use that figure to determine whether the home you’re considering is priced correctly.
But this only works if everyone uses the same process to determine square footage. Many real estate advertisements in this area are misleading , and not always intentionally. While it’s obvious that a real estate agent is interested in making a home appear larger, square footage can also be a tricky number to determine. For example, different completed parts of a house are valued differently and distinctions are made between different parts of the house. To make sure you’re not overpaying for your home, you need to understand these differences and do some research.
Living area
The first thing to understand is that square footage is not a monolith. Different areas of the house are taken into account differently when assessing:
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The living areas (sometimes called the common living area ) of a home are complete spaces above sea level with constant heat sources.
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The adjusted area is the living area plus a percentage (usually one-half) of the deck, balcony or garage.
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Total Living Area (TLA) is the living area plus all patios, balconies, basements and garages.
When trying to figure out the comparable values of homes in your area, you need to know whether you’re looking at gross square footage or just living square footage, since the latter matters in determining the price per square foot.
Let’s say you want to buy a $500,000 home that is listed as 2,000 square feet – the price per square foot is $250. You want to know if this is a good price, so you look for comparable homes in the area and see that it is – most similar homes have recently sold for a similar price per square foot. Big! But then you discover that the house actually has 1,200 square feet of living space plus 800 square feet of other space. The price per square foot is actually closer to $417, which means you may be overpaying for the home—significantly, depending on how you value those other spaces and other aspects of the home.
Something else to note: Even finished spaces that are below grade (such as basements) are usually not included in the living area calculation because they are not typically included in the assessed value. You may be willing to pay more per square foot for a home because it has a finished basement, but this space is often excluded from official square footage calculations. Additionally, any finished area that is not accessible from the main living area of the home, such as an accessory dwelling unit (ADU) on the lot, should not be included in the official square footage of the home.
Determination of area in square meters
There are exactly zero laws governing square footage measurements, so it is the buyer’s responsibility to determine or confirm the square footage of the home. While real estate agents are expected to provide accurate property information, it is easy to make the mistake of lumping living space with adjusted square footage or counting a finished basement as part of the living space even if it is below grade. This is because many agents get their square footage information from tax records (which may be inaccurate ) or from sellers who may be misinformed or confused about what is and is not considered living space.
The easiest way to determine if a home’s listed square footage is accurate is to go out there and measure it. This doesn’t have to be 100% accurate – a few minutes in each room with a laser tape measure will give you a rough idea of the square footage (you can skip the garage and underground spaces), and as long as it’s close to what’s advertised, you can use this number when calculating your real estate offer. You can also hire a licensed appraiser to professionally measure your home, giving you accurate measurements and a clear division between living space and adapted space.