Understanding Square Footage Verification in an Appraisal: Why It May Differ from Homeowner Expectations

February 3, 2025 by
Understanding Square Footage Verification in an Appraisal: Why It May Differ from Homeowner Expectations
Minson Appraisal Group
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Square footage verification is a crucial aspect of real estate appraisals, yet it is often a point of confusion and contention among homeowners, buyers, and sellers. Many property owners assume the square footage listed in tax records, previous appraisals, or builder reports is accurate, but discrepancies can arise for several reasons. A professional appraisal provides an objective measurement that ensures the most precise valuation of a property.

Why Square Footage Matters in an Appraisal

Square footage plays a significant role in determining a home's market value. The amount of livable space influences pricing, real estate transactions, property taxes, and refinancing decisions. Even minor discrepancies can lead to significant financial consequences. If a home is overvalued due to an inflated square footage estimate, a seller might face price reductions or hesitant buyers. On the other hand, an undervalued home might mean leaving money on the table. Lenders also rely on precise measurements when assessing loan eligibility, making accuracy essential from all perspectives.

Why Appraisal Measurements Differ from Expectations

Many homeowners are surprised when an appraisal results in a different square footage figure than what they expected. One reason for this is that different entities use different measurement methods. Builders, tax assessors, and real estate agents often rely on varying standards. While builders might measure from exterior walls, tax assessors may use rough estimates based on property records rather than an in-person evaluation. Appraisers, however, use highly standardized industry practices to ensure an unbiased and precise calculation.

In Utah, particularly in areas like Salt Lake County, Utah County, and Davis County, tax records are not always reliable sources for square footage information. Many county tax offices do not physically measure properties and instead depend on self-reported data or estimates made when a home was originally built. If homeowners have made any structural changes, those modifications might not be reflected in official records, leading to discrepancies when compared to an appraisal.

Another factor that affects square footage calculations is the treatment of unpermitted additions. Homeowners who have enclosed patios, finished basements, or converted garages often assume those areas count toward the total square footage. However, if the additions were not built to code or lack proper permits, an appraiser may exclude them. Similarly, appraisers generally follow strict guidelines regarding what constitutes livable square footage, meaning that unheated spaces or rooms without proper flooring and finished walls may not be included.

How Below-Grade Square Footage is Calculated

One of the most common areas of confusion in square footage calculations is how below-grade spaces, such as basements, are measured and valued in an appraisal. Appraisers follow strict industry guidelines, such as those outlined by the American National Standards Institute (ANSI), which differentiate between above-grade and below-grade living areas.

Below-grade square footage refers to any portion of the home that is located below ground level, even if it is partially exposed. This includes fully finished and partially finished basements. Unlike above-grade living areas, which are counted in the home's Gross Living Area (GLA), below-grade spaces are measured separately and valued differently.

A fully finished basement can add significant value to a home, but it is typically not included in the total GLA. Instead, appraisers list basement square footage separately and assign value based on market trends, quality of finish, and usability. For example, in Salt Lake County, finished basements can be highly desirable, especially in larger homes, but their contribution to overall value depends on local market preferences.

Even when a basement is finished to the same quality as the main living area, appraisers often assign a lower per-square-foot value than above-grade living space. This is because below-grade spaces generally do not provide the same level of natural light, accessibility, or immediate usability as above-grade areas. If a basement includes walk-out access or large windows, it may be valued more favorably compared to one that is entirely underground.

For homeowners, understanding how appraisers handle below-grade square footage is crucial. If a seller expects their 1,000-square-foot finished basement to be included in their home’s total square footage, they may be surprised when it is listed separately in an appraisal report. Buyers should also recognize that while a basement adds value, it does not carry the same weight as above-grade living areas in determining overall home valuation.

The Appraisal Process for Square Footage Verification

When conducting a square footage verification, an appraiser carefully measures the home using professional tools such as laser measuring devices and tape measures. The process involves physically walking through the home, assessing each room, and confirming the layout against available records. This meticulous approach ensures accuracy and eliminates estimation errors that sometimes occur in tax assessments.

In addition to taking physical measurements, an appraiser will review existing floor plans, compare records with county data, and analyze any documented changes to the home’s structure. If inconsistencies arise, the appraiser must determine which measurement is most reliable and explain any discrepancies in their report. For example, if a home has undergone a remodel that included expanding a bedroom or adding a sunroom, but those changes were never officially recorded, the appraiser must decide how to handle that information within the appraisal process.

The Impact of Square Footage on Property Value

A difference in square footage can have tangible consequences for homeowners. If an appraisal results in a lower-than-expected measurement, a seller may need to adjust the asking price to align with market expectations. Buyers might also use a lower square footage figure as leverage to negotiate a better deal. On the refinancing side, lenders use appraised square footage to determine loan amounts, which means any discrepancies could affect the financing process.

For homeowners who want to ensure accuracy before listing their property, seeking a square footage verification from a certified appraiser can provide clarity and confidence. Understanding that appraisers adhere to industry-wide standards can also help temper expectations and avoid surprises during the transaction process.

A Final Perspective

Square footage verification in an appraisal is not a simple measurement—it is a standardized, carefully executed process that ensures fairness and accuracy in real estate transactions. Many discrepancies arise due to differences in measurement standards, outdated tax records, and unpermitted modifications. By understanding why an appraisal may produce a different figure than what a homeowner expects, sellers and buyers can approach real estate decisions with greater awareness and fewer surprises.

If you need an accurate, professional square footage verification in Utah, including Salt Lake County, Utah County, and Davis County, Minson Appraisal Group is here to help. With extensive experience in property appraisals, our certified professionals provide reliable, court-ready valuations to support your real estate needs.

Understanding Square Footage Verification in an Appraisal: Why It May Differ from Homeowner Expectations
Minson Appraisal Group February 3, 2025
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