Home Selling in Sharon>Question Details

Rabasheer, Both Buyer and Seller in Sharon, MA

How is the square footage calculated for a home? Does finished basement and a well developed yard add to the home value? There was a nice article in B

Asked by Rabasheer, Sharon, MA Fri Dec 17, 2010

Boston globe describing how a landscapes and hardscapes around the house can enhance the value by 50K in a neighbourhood. Do the banks look at it the same way while appraising a home?

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Tom and Joanne Team’s answer

1. Square footage is calcuated by taking the length and width of the exterior of the home. Although the basement is not taken into account in the gross living area, it is used when determining market value. The distinction is that the above ground living space is worth more money per sq. ft. than the basement space.

2. The yard will have more impact in a tier 1 town than it would in a tier 3 town. Could it enhance the value $50K, Yes.
0 votes Thank Flag Link Sun Jan 30, 2011

I'm surprised at the lack of clarity of the article and responses, especially since the most accurate one came from Las Vegas!
I assume you are concerned with Living Area, which is as mentioned Finished Area above grade. Many Agents will count a properly finished basement and disclose that it has been added to the finished sq footage.

No, decks are never counted, ever. Unfinished attics and basements likewise.

A finished basement to code, with proper height and egress can be with proper disclosure.

An appraiser will use above grade st footage and make a discounted adjustment based on construction cost. Truthfully though... that does not properly represent what a buyer may pay for it. A well finished basement may add more to the value and price than that discounted figure. Appraisals are fairly mechanical, using typically homes within 20% living area, within 0.5-1 mile preference given to similar style. Appraisers can make many adjustments for amenities such as garages, condition and more.

I am obviously biased, but think that a free, market analysis from a Local Realtor that compares the home in question to other sold, active and under contract listings. An appraisal will also be a useful tool, but will be fairly expensive and not include comparison to active competition.

Please feel free to contact for a comprehensive report or advice.
1 vote Thank Flag Link Sat Jan 22, 2011
As a former appraiser, one of the biggest obstacles an appraiser faces is the underwriter. Appraisers will tend to avoid making adjustments for subjective features, such as landscaping, that are difficult to make comparisons to. It is quite easy for ex to show in the sales comparison grid bathroom count and make adjustments to them. But an adjustment for enhanced landscaping will draw a red flag in most cases from the underwriter who will question how the appraiser came to this dollar amount conclusion. It will certainly draw added interest from most buyers, but in the appraisal it will likely be a small adjustment in comparison to the cost to complete. Still a great investment, especially in a town like Sharon where most buyers will pay a premium for it. But you should be sure not to over improve or over customize your landscape without first looking at the recent nearby sales that will play a factor on your value. I would get an appraisal or have a Realtor value your home, prior to doing the work.
0 votes Thank Flag Link Fri Jan 28, 2011
Basements add to the value but when you are calculating overall price/square foot you should only count the basement as half value compared to the rest of the home. Landscaping on the other hand is worth a lot of value (similar to kitchens) ... However, its hard to say whether the bank appraisers will calculate the value of great landscaping properly.

Web Reference: http://territory.com
0 votes Thank Flag Link Wed Jan 26, 2011
As usual most of the articles that appear in the newspapers about real estate are incorrect. This one would be incorrect as well. If your home is only worth $100,000 landscaping will not enhance your home by $50,000. Your square footage is calculated based on interior usable space. A finished basement adds to the value of your home, if it was permitted and finished to code. However, if you have one of those basements done by a "do-it-yourselfer" that has exposed wires it detracts from the appraisal of your home. An appraisal is figured on the usable space and the relationship to the homes on the block (or up to a mile away) that have the same square footage, and the same lot size. If you have redone your kitchen and bathrooms and have nice landscaping it adds minimally to the value. Square footage, lot size and recent sales are what count the most. Finished basements and room additions are valued at 30% of their cost for appraisal purposes assuming they were permitted and done to code.
0 votes Thank Flag Link Sat Dec 18, 2010
Not sure who wrote that Boston Globe article, but it certainly wasn't an appraiser. Square footage for appraisal purposes is above grade only, and does not include the garage. A finished basement can often add $10,000 in value for the average home, more if there is a bat, either full or half. A deck or patio outside will add some value, but generally not more than $5,000. paving stone driveways or walkways do not add value at all for appraisal purposes. It would certainly appeal to a buyer, and your house will sell faster, but to make a statement that a well developed yard would add $50,000 to value is irresponsible, in my opinion.
0 votes Thank Flag Link Sat Dec 18, 2010
Hi, The answer by Jack Vollenberg is, in my humble opinion, the most complete and accurate answer. Everything is judged by what is the norm in your neighborhood and by what comparable homes with comparable features have sold for. If a ready, willing and able buyer paid extra for a home with superior landscaping, for a property in your neighborhood, and the home has officially closed the appraiser will use that property as a comparable for determining the value of yours.
Web Reference: http://www.BerkleyMass.com
0 votes Thank Flag Link Sat Dec 18, 2010
Hi Rabasheer,

You're getting conflicting answers when your question is addressed by different categories of real estate professionals. I will answer your question from the perspective of the appraiser who is writing up a value estimate that was requested by the bank.

Appraisers measure Gross Living Area (GLA) for single family residential homes. They do so by measuring the exterior footprint of the house and include all above grade living space that is permanently heated. Typically we exclude basements, except when there is enough natural light to clearly make it part of the GLA. However, this is up to the individual appraiser who can make that on the spot decision. In reality, as long as we compare equally between similar homes to arrive at the estimated value, the decision to include or exclude becomes less important as we are already comparing to homes with similar amenities and lower level setups.

The same logic is true for exterior amenities such as extensive landscaping. If this is typical for the area that the home is in, it would not count towards the value as it is already part of the sales prices for the neighborhood. Again, compare apples to apples. If the extensive landscaping is atypical for the area, most likely some value will be allotted for the added amenity, although that value may be less than what replacement value would be. I myself always ask what improvements/renovations/updates were made during the last 10 years and I make sure to included these in the final report.

Hope that helps explain the appraisal process some.

Jack Vollenberg
RE Appraiser - Vollenberg Appraisers
Realtor/REO Asset Manager - NJ Real Estate Associates LLC
Office (908) 968-0336
0 votes Thank Flag Link Sat Dec 18, 2010
Sharon, that is a great website you added to your answer. I just checked it out and found it to be very useful.
Thanks for attaching the link to it.
0 votes Thank Flag Link Fri Dec 17, 2010
I'd like to share with you and others, a website that I found useful when comparing the average cost for remodeling projects with the value those projects retain at resale. You simply choose your state and start your search. Here is the link; http://www.remodeling.hw.net/2010/costvsvalue/national.aspx
Sharon Lucido
Web Reference: http://www.bournetosell.com
0 votes Thank Flag Link Fri Dec 17, 2010
I have been told appraisers do not consider below grade unless it is walkout. Even with a walkout, I have had clients whose finished basements were not counted by assessor or appraiser.
Adding value to your property varies from neighborhood to neighborhood. Curb appeal is extremely important, but be careful not to over do it for the neighborhood. On most renovations you don't get every dollar back in value. Adding 50k in value, probably costs much more than 50k.
0 votes Thank Flag Link Fri Dec 17, 2010
I forgot to add, in our area, not only does the finished basement and attic add to the square footage, a Deck will also be cosidered living space and will count as such!

Ray Garcia
0 votes Thank Flag Link Fri Dec 17, 2010
The Town assesor will use the foot print for the property as their starting point. In other words, if the footprint is 48x28, and your living space is comprised within that footprint, then you have a 1,344 sqft home. Now, add to that a second floor and you have doubled your sqft living area to 2,688 sq ft. A basement will be calculated and added to the total living area by measuring the "living" area in it. In other words, the mechanical room will not be counted, therefore the basement, while still part of that foot print, will be measured by actual living space. The same goes for an attic.

Curb appeal is great in the eyes of a prospective buyer, as long as the neighborhood follows your lead. A bank appraiser will look at the overall condition of the street to help determine value, the value will mostly be determined by the condition of your home and area where it's located. The Banks will only use the appraisers estimate to determine value.

A thorough CMA (Comparative Market Analysis) will give you a vey good estimate of your homes value and who your competition is.

If you need further assistance, let me know.

Ray Garcia
0 votes Thank Flag Link Fri Dec 17, 2010
Square footage of the home and yardage are under different calcualtions. The square footage of teh home includes finsihed square feet above ground. It does not include finished basements or garages.

As far as the yard it does add some value but adds more desirability which makes the home more desitable than a house without a nice yard. This therefore shoudl attract more potential buyers which leads to a quicker sale at a higher price.
0 votes Thank Flag Link Fri Dec 17, 2010
Good morning!

The square footage should be calculated by measuring the rooms - not including the common areas such as hallways and bathrooms and not including unfinished areas such as attic spaces. A finished basement can be included but it must be disclosed as being included.

The value of a well developed yard varies and although greatly adds to the marketability of your home it doesn't necessarily add value to a bank appraiser.

Do you have the link to the article? I'd like to read it!

0 votes Thank Flag Link Fri Dec 17, 2010
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