What is Included in the Square Footage of a House?

icon for what is included in the Square Footage of a House

When Measuring a House, What Counts?

Not all of the space under your roof counts as living space from an appraiser’s perspective. Some spaces don’t count towards the measured square footage of a home.

You should always have a local, qualified professional determine answer your appraisal-related questions for any specific property. Do not make decisions about real estate based on the information in this article or on this website. 

What Do Appraisers INCLUDE in the Square Footage of a House?

  • Interior spaces that are conditioned spaces (heated, and cooled, if necessary) such as bedrooms, bathroom and living rooms.
  • Enclosed patios that are heated and (if the rest of the house is) air-conditioned and are similar in workmanship (quality) as the rest of the home.
  • Finished attic space as long as it also conforms to the original structure (can’t just add carpet and call it a bedroom).
  • Below grade rooms only when typical for the market (for example: a home built on a sloping lot).
  • All of the interior closets, entries, utility rooms, unless they meet the exclusion descriptions, below.

What do Appraisers EXCLUDE in the Square Footage of a House?

Some common spaces are not considered to be living space and are therefore not included when calculating the square footage of a house:

  • Screened patios (and open ones as well).
  • Garages, unless they have been converted to living space. Read The Value of a Garage Conversion.
  • Unfinished areas, regardless of the level in the home.
  • 2nd floor airspace (for example: open space, above an entry, or a vaulted room)
  • The open area above a stairway on the second floor.
  • Basements.
  • Detached living space such as an office in a extra building on the property – these spaces are measured separately.
  • Spaces that are accessed only by traversing non-living space, like an enclosed storage area of a garage.

These spaces may be determined to add value to the property upon analysis of the comparable properties in an area, but they are not included in the square footage.

Some spaces, such as a finished basement, may add value, but at a lesser rate than other finished (above-grade) spaces. This is determined on a case-by-case basis, based on the quality of the space and how the market has recently responded to similar homes.

More Articles on Square Footage of a Home

Read our 3-part series on measuring a home, starting with Determining the Square Footage of a Home for more information.

A Property Tax Assessment is not the same as a Property Appraisal

All About Your Property Tax Assessment

Is the property tax assessment on this home accurate?
Is the property tax assessment on this home accurate? Probably not.

Your tax bill arrives and you have a heart attack. If your property is worth the property tax assessment the taxing district thinks it is worth, it’s time to SELL and retire to Aruba! If only.

Tax Assessment and Market Value Differences

Property tax assessments fall into three categories:

  • Low
  • Plausible (somewhat close)
  • High

If you’re in the first two categories, pay your taxes, file the paperwork and go fishing. If you’re in the last one (high), gear up to protest your property taxes, armed with real data that can help your cause. You should read, How Do I Appeal My Property Tax Assessment?

How Do Taxing Districts Determine Value?

If tax values aren’t the same as market value, how do taxing districts such as the Travis County Appraisal District (TCAD) come up with their numbers?

Tax districts use massive software programs with sophisticated algorithms to assess property values in an area. Although these values are supposed to assess property at actual market value, they frequently don’t.

The reasons for this are many, and include:

  • These programs use data available in public and governmental databases. This data may be accurate (number of bedrooms, size of the lot), or it may be wrong (3 bedrooms when a home has four because the game room was converted when the addition was added and the addition isn’t in the property records yet).
  • The software does not know about the actual condition of each property. Condition matters. In Travis and Williamson Counties, the programs use something called percent good, which is a marker of how nice your home is. Low percent good means the property isn’t in good condition, average condition (from my personal observation) seems to be in the 70s. High percent good ratings trigger the assessing program to give a higher value to your home as compared to a home that is otherwise completely comparable in size, location and condition that has a lower percent good rating. Although the taxing district is supposed to come out and verify these ratings in each neighborhood, that doesn’t always happen.
  • The application is frequently unaware of the market boundaries that define where values change, and sometimes they change by quite a lot. You may already recognize these boundaries, such as a major road where the subdivisions on either side map to a different elementary school or where one is much closer to noisy or yucky stuff (a stone quarry).

All of those things (or any of those things) will make your property tax assessment differ from what it should be.

How Do Appraisers Determine Value?

Appraisers determine fair market value differently than taxing districts. Some key differences:

  • Appraisers do not use automated valuation programs when appraising individual properties.
  • The appraiser will visit your property, measure it, and assess the actual condition of the property. Read Appraisal Steps: Determining the Market Value of Property.
  • After he or she has inspected your property (the appraisal inspection), he or she will carefully analyze your property vs. the most comparable (similar) properties that recently sold in your area, which is the Sales Comparison Approach, one of the three approaches to value used by professional appraisers.
  • When the analysis is complete, the appraiser will reconcile all of the information and arrive at an opinion of value which will be the appraiser’s opinion of the Fair Market Value of your property.
  • A good appraiser will understand the boundaries of market areas and other factors that influence the value of your own property and your report will reflect this expertise.

Protesting Your Property Tax Assessment: a Personal Tale

The value of this home was less than the property tax assessment on it. TCAD agreed.
The actual market value of this home was less than the property tax assessment on it. The taxing district agreed at the formal hearing and lowered the tax value.

The first time I protested my tax assessment in Texas (Travis County), long before I even knew anything about the practice of real estate appraisal, the guy showing me the data kept flashing numbers on the screen for a much newer subdivision that was across a major road that mapped to an elementary school that was, at the time, widely regarded to be superior to the elementary school in my neighborhood. In addition, the newer homes were closer to the city center, and had better access to major transportation corridors.

I pointed out a few things: the homes were much newer (built after 1994, vs built before 1982), the homes were on bigger lots (on average), the homes mapped to a better school. Of these three points, the hearing panel was interested in the first two (age and lot size) because these are more concrete data points. They weren’t particularly interested in my third point (the school). I also pointed out that my own area had an ample number of homes (thousands) that were arguably comparable in age and lot size to my own, with lower assessments, and questioned why they would skip those comps and use homes that were several miles away. I also quibbled with the percent good number assigned to my home (90%) when almost all of the others on my own street were marked in the 70s, including ones that I personally knew had expensive new updates that made them far superior in quality to my vintage 1982, seriously ugly house.

The formal hearing panel agreed with my assertions and lowered my tax assessment by about $25,000, which saved me about $700 that year alone.

Another year, I used a similar argument and saved even more. The next year, though, my property tax assessment was close to market value, so I let it slide.

Protesting Your Tax Assessment: Your Own Story

Have you received your tax bill in years past, heaved a big sigh and paid it? Why?

If you’re one of the folks whose property value is higher than the likely fair market value, fight it. What have you got to lose? What have you got to gain?

Facing the formal hearing panel the first time can be intimidating, but don’t let it get to you. Arm your self with concrete data, and if you’re really uncomfortable arguing your case, hire a tax protest company to argue for you.

One excellent piece of evidence you can (and should) use to protest your taxes is a professional real estate appraisal, from a certified residential appraiser.

Hire us to perform your appraisal, and either you will discover that the property tax assessment is low, close, or high. A typical appraisal will cost $350 to $425, depending on the size and complexity of the property, and this is money well spent. If we were to receive another tax bill for our own home that felt out of bounds, we would hire another appraisal firm to appraise our own property, to provide the evidence we needed to protest. (We can’t appraise our own property because that would be a conflict of interest.)

To get started, read our more specific tax protest, How do I Appeal my Property Tax Assessment?

Another good read is, Appraisal Steps: Determining the Market Value of Property.

Determining the Value of Texas Waterfront Property

Waterfront Property: How is Value Determined?

At the most basic level, the value of property, including waterfront property, is the price the market will bear. If you are considering purchasing (or selling) waterfront property, you need to read this article.

When neither the buyer nor the seller are distressed (facing foreclosure or other undue financial pressure), and the property has received normal market exposure, the price they agree on should be a reasonable reflection of Fair Market Value of the property.

If Only Finding the Right Price Were That Simple

Before this event can happen (buyer and seller coming together under contract), someone has to determine the listing price of the home, i.e. the price at which the home will be offered for sale.

For waterfront property (lake front property, beach front property), some of the factors that influence pricing are:

  • View
  • Waterfront footage
  • Access to the water (for people, for boats)
  • Storage, docks/slips for boats
  • Location on the body of water (for example, in a cove where the water might dry up in a drought)
  • Acreage
  • Guest accommodations
  • Condition of the septic system, or access to city sewer

In addition to someone figuring out a reasonable listing price for the property, the buyer side of the transaction also has to come up with what they think is a fair price, or the price they are willing to pay for the property. The seller side of the transaction is usually a Realtor working with the owners to determine pricing, or a Realtor using their own analysis (Competitive Market Analysis, or CMA) along with a certified residential appraisal.

Appraising Lakefront and Waterfront Properties

Over the years I have appraised many types of properties including vacant land, large acreage, ranches, subdivision homes, condominiums, small income properties and others.

However to this day I believe that lakefront or water front properties tend to be some of the most challenging assignments.

The challenge however lays mostly in the location. The farther out and the more undeveloped the submarket is, the more challenging the assignment. Take Point Venture for instance. This community is very far out there in the northern shore of Lake Travis, approximately 22 miles northwest of downtown Austin (which could also turn into a long commute). This particular submarket tends to bring more of the vacationer types, therefore, the market tends to be a little slower and marketing times tend to be longer, thus, making the availability of comparable sales pretty limited.

Appraisers rely heavily on comparable sales to determine the value of property, as part of the Sales Comparison Approach. Comparable sales are properties that share similar characteristics with the subject property that have recently sold. (“Recently” should be 6 months or less, but sometime it is necessary to look further back in time).

Finding and Analyzing Comparable Properties

This is where the challenge begins and it’s where you (or the appraiser!) really need to put your thinking hat on.

Early steps in the appraisal:

  • Determine the availability of comparable sales over six months, twelve months and sometimes a little longer.
  • Analyze the active listings and any pending sales.
  • Look for the best ones, the ones that are actually the most similar to the subject.
  • Consider the subject’s view.
  • Determine the actual lake frontage and whether or not it is in a cove where the dry season would really affect value (believe it or not).
  • Assess the availability of floating docks, lifts and so on.

These are things to consider – there are good reasons why people pay top dollar for these type of dwellings (the boating enthusiasts, the entertainers).

Do you think you could figure the value of these items?

A Quick Peek at a Matched Pair Analysis

One of the widely taught appraisal theories, the matched pair analysis works something like this (in the perfect world of course).

See the example below:

Simple-Comparison-for-Lakefront-Property

At this point, you’ve guessed it right if you guessed that the view adjustment would most likely be $20,000. Only if it were that easy.

You get the idea, but, of course in the real world it gets a lot more complicated than this.

Consider this example of three (theoretical) waterfront properties that recently sold:

Complex-Comparison-for-Lakefront-Property

So now, we’re getting a little closer to the reality of the complexity of appraising lakefront property.

In this particular example you can see that there are many factors to consider such as: the lakefront location, whether the property is in a cove or not, the actual size of the dwelling, whether there’s a dock or boat slip or not, pool or no pool, guest house or not, and last but not least, the lot size. Now try and guess the adjustments.

This time it gets a lot more complicated, now we get to do a more in depth analysis, so we start looking for other properties that are similar to the ones above and try to extract the dollar figures for those differences and come up with the adjustments.

This is only the beginning. Other things that we must consider include condition, quality, design, upgrades, updates, construction materials and the list goes on.

If you’re considering selling or buying lakefront property, consider getting a professional appraisal (from us, if you’re in Central Texas – the Greater Austin Area) so that you understand the factors that contribute to the value of the property, from the open market standpoint, which is also what a lender’s appraisal will consider as well.

Appraisal Tools for Property Appraisals

Icon of Toolbox Representing Appraisal Tools

The Best Appraisal Tools

This year we have focused on integrating the newest and the best appraisal software and appraisal tools into our property appraisals business.

Before we talk about modern appraisal tools, let’s take a trip down memory lane.

Quick Clicks For Article Sections:

Appraisal Tools: 1990s

I remember when I first started appraising, way back in 1991 or so: the days of 386s, DOS and Windows 3.1.

We used Total (now called WinTotal) from a la mode, took 35mm (film!) pictures and waited for them to get developed. We used microfiche to look up comp data and were so excited when the comp data became available on CD ROMs!

Appraisal assignments back then certainly took longer to complete and to deliver – we hand delivered or sent them by postal service or messenger services! Appraisal practice has definitely come a long way since the 1990s.

Appraisal Tools: 2010

Now use high-resolution digital cameras and on-line systems such as the MLS, tax records, and mapping and zoning information databases.

And, of course, we have Google. What did we do before we could Google everything?
We are far, far more efficient than we used to be, but the art of appraising has become more complicated at the same time. Clients demand (and rightfully so) more data, the analysis of comparables has become more sophisticated and lenders require more substantial information about market areas.

Now, we get an appraisal orders through email or from appraisal management portals. Surprisingly, we still get most of our confirmations by fax.After hours of patient and methodical research and adjustments, aided by the fantastic new tools of the trade, reports are uploaded and delivered to clients online, in the blink of an eye.

The Appraisal Tools We Use Every Day

Our office looks like the office of people that love love love computer equipment: wide-screen monitors (two per desk), cables hanging out everywhere, little gadgets plugged in to charge or upload or download data.

Our Favorite Toys (aka Tools):

  • We use an Apple iPad with the DaVinci sketching app. I can sketch a house with the software as I am measuring on site, as opposed to sketching it out by hand and then entering it into the computer later when I’m back at the office.
  • A real estate appraisal sketch on an Apple iPad

  • With the Disto D5 Digital Laser Rangefinder from Leica, I can measure accurately and efficiently at the property, enter the pertinent measurement and property condition data into my iPad and then sync it with my desktop later.
  • A Canon Digital Point and Shoot Camera (the latest being a pair of PowerShot SD1200 cameras with Image Stabilization) make taking photos a snap and the quality is outstanding.

Why does this matter to you? You ask? We can provide you with more accurate data (the rare mis-measurement is readily apparent on the software sketch) and the use of these tools improves the turn times on appraisal reports.

Better, faster reports from us, means better client relationships for you.