What Is Gross Living Area vs. Gross Building Area?

Purchasing or selling property has greatly revolutionized. Whether you are a homebuyer or commercial property seller, you cannot skip the integral step of ascertaining the property’s fair value first. Otherwise, you will be entering into a blind transaction that comes with its fair share of consequences.

To understand the worth of the property, you must first grasp some of the fundamental terms that go into defining it. You will probably encounter different property descriptions on your appraiser’s evaluation report, tax roll, or even on the Multiple Listing Service.

Most of these terms are paired with square footage and understanding their interrelations helps you make better choices at the end of the day. A term like Gross Living Area has a sharp contrast with Gross Building Area, both of which are important metrics in evaluating a property’s square footage before assigning a value to it.

Since property value is estimated per square footage, understanding these differences is imperative before entering into the transaction.

Ready to become an informed property buyer or seller? Come along as we explore some of the terms you are going to interact with during the life-changing transaction.

What is an appraisal?

An appraisal is the act or process of developing an opinion of value or simply put, an opinion of value. It involves providing an unbiased expert opinion of a property’s value.

The term appraisal has a tendency of popping up in buying, refinancing, and selling transactions involving commercial and residential properties.

A proper home appraisal essentially protects you from overpaying for a property. Sadly, most property buyers and sellers are usually confused around the subject. Once you know who will be performing your appraisal, it is also imperative to understand how the appraisals are created and the industry standards used.

Who does an appraisal?

An appraisal, whether its commercial or residential, cannot be performed by any party or entity that would stand to gain from any appraisal outcome (high or low appraisal). That means a lender, buyer, or seller cannot conduct an appraisal by themselves.

That leaves room for an independent or unbiased appraiser or simply put, a professional appraiser. Working with a licensed and certified appraiser guarantees you enough peace of mind throughout the transaction because you are certain the expert will cover all aspects to reflect the true value of the property.

What do appraisals include?

Appraisals are based on different factors depending on a property’s age. Generally, appraisers check the following items.

  • Comparing similar property types (lot size, square footage, and features)
  • Asking price and purchasing price of properties
  • Land value estimates
  • Property replacement costs
  • Integrity of the property’s foundation, siding, roofing, and overall structure
  • Interior quality (windows, doors, flooring, plumbing, and appliances)
  • Front and back yard size
  • Lawn fixtures or landscaping
  • Outdoor features and structures (patios, decks, pools, and hot tubs)
  • Property upgrades

Why is square footage important in appraisal?

Professional appraisers rely on square footage to get an idea of the total living area and assess the value of the property accurately. This information is important to the appraiser when approaching different property types that require different measuring standards.

In other words, without square footage measurements, the appraiser would have a hard time calculating your property’s Gross Living Area or Gross Building Area, which are critical metrics when buying or selling a property at its true worth.

What is gross living area (GLA) for an appraisal?

GLA is a simple acronym that stands for Gross Living Area. Gross Living Area is all of the above-grade floor space inside your home. The appraiser will typically determine the Gross Living Area of a property by measuring its exterior dimensions. Expect to find this term in your appraiser’s report.

When determining the square footage of a property, the appraiser takes into account the living space. This measurement is common with single-family houses. For such houses, the Gross Living Area will comprise all the living space above the land-line that also includes lighting, heating, and ventilation.

That means when calculating the gross living area of a house, all the major rooms’, bedrooms’, bathrooms’, kitchen’s, as well as the hallway’s footage is factored in. A finished attic space that’s heated and has at least 5-foot walls is also included in Gross Living Area.

Garages, patios, and porches are excluded from Gross Living Area calculations. That said, an exception arises in case you decide to heat your enclosed porch or convert your garage into a living space, of course, backed by the needed permits.

In the case of a co-op or condominium, the appraiser calculates Gross Living Area by taking the measurements of the unit’s perimeter section.

Gross Living Area and looking above the land line-does it matter?

Yes, it matters. As earlier mentioned, measuring square footage for the gross living area only involves the rooms above the land-line. That means even if you have a finished basement, it won’t be considered as part of Gross Living Area because it lies beneath your property’s grade level.

This rule holds true even if the space that is below grade is complete with a bedroom or kitchen or has windows. Additionally, if the room is partially above ground, it is still not considered in Gross Living Area measurements.

Although below-ground living spaces are not included in Gross Living Area measurements, the appraiser will still list them in their appraisal valuation for sales comparison.

What is gross building area (GBA) for an appraisal?

GBA is also a simple acronym that stands for Gross Building Area. Not to be confused with Gross Living Area, Gross Building Area is all of the space including below-grade space, as long as it is finished.

Gross Building Area is typically used when referring to 2-4 unit properties and commercial properties. Not so much with single-family residential properties.

It covers the square footage of interior hallways, stairways, laundry rooms, and storage rooms. However, in case the property has an exterior stairway, it is excluded from the footage measurement.

Gross Building Area and basement space-is it included?

In determining Gross Living Area, every space that is fully or partially underneath the land-line is considered below grade. Therefore, in the case of a multi-family property that has a below-grade living space, its footage goes into measuring gross building area and not Gross Living Area.

However, note that while a finished basement in a single-family building is not considered in determining Gross Living Area, it is still assigned a value in the appraisal through comparison with other properties having finished or unfinished basements.

Since commercial buildings are primarily used for business occupancy or to obtain rental income, even unheated or uncooled spaces of industrial buildings may be included in the gross building area. This is essential because the use of that particular space is still critical to the functionality of such a property type.

How does Gross Building Area differ from Gross Living Area?

The key difference between gross building area and gross living area is the inclusion of below-grade living space in Gross Building Area, which Gross Living Area doesn’t consider.

In addition to that, Gross Living Area is a generally accepted industry measurement for residential properties. On the other hand, Gross Building Area is commonly used for commercial and multi-family property appraisals.

Why do they matter?

The appraisal industry relies heavily on these two measuring standards to ensure appraisers only compare apples to apples during the measurement and appraisal of a property.

Having a consistent measuring and valuation method helps reduce the liability of the parties involved in the property purchase transaction.

Let’s get you appraised!

Ready to work with an affordable, licensed, and experienced property appraiser? ExcelAppraise is your one-stop-shop for all that and more. We provide a wide range of residential and commercial appraisal products and services. We promise to give you an appraisal process second to none.

If you’re interested in a free quote, call us today at 1-801-882-2292!

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