Can Basement be considered part of gross living space

Question

I am currently under contract to sell a SFR flip here in Ohio and the buyer is questioning the square footage.  We purchased the home base off MLS listing and our previous Auditor site posted as 3600 sqft 5 bd 4.5 ba which compares to the listing.  The county switched companies December 2021 and now have a new Auditor site which now shows 2500 sqft 4bd 4.5 bath.

Buyer paid for an appraiser to calculate sqft today and the contract is contingent on this due to the deacrepency.

We have a full basement downstairs with kitchen and the bedroom has a massive egress slider window with stairs to climb out.   Can the basement be calculated into this gross living since the egress window Is there?  We believe it was calculated initially so we'd like to understand how to get it added.

Aside from this, how do you go about getting the County Auditor to correct the survey done whichever way this goes?

What can we do so this deal still will still be in our favor?   Thanks all and looking forward to everyone's feedback!

Brad S. · Answer

So, the quick answer is no, the basement is not considered part of the main gla (gross living area) of a house. This doesn't mean it has less "value," but it is considered "below-grade" square footage. We (Appraisers - I am one) are now bound by a specific set of measuring standards (ANSI - American National Standard Institute) when measuring and reporting gla of a house.

Basically, if an area is even a little bit below grade, the whole level should be counted as below grade. So, your county should be reporting your gla without the basement or the basement may be reported as a separate line. Again, this doesn't mean the basement has less value than the gla, but unfortunately, it may affect some buyer's perceptions. Also, to complicate things other neighborhood properties may have their basement reported in their gla previously (prior to the ANSI required standards), so the county's records may not adhere to the new standards. This causes a potential issue with comps, since they may reflect both above and below grade gla or just above grade gla. So, comparing properties with similar gla, becomes convoluted.

Nick C. · Answer

We don't have basements here in Florida, but we do have additions. As long as it's "heated sq footage" it's as easy as calling the property appraiser and getting the sq footage added to public records. They usually send out an inspector to verify. They are happy to add the sq footage, then the property can be assessed higher and they can get more property tax dollars. Hopefully it's that easy in your area as well, either way the property appraiser is a good place to start.

Eunice Villarroel · Answer

Wow kind of hurt at you saying that Floridians should stay out of this lol. As someone who owns property in other states like Utah I know for a fact that sometimes basements are considered part of livable square footage specially if they meet certain requirements the main one being a legal ingress or egress which adheres to the building code requirements of the state. In other words it’s varies state by state.

A very amazing point that you made though is that it does increase property value as a whole specially if it’s a finished basement Even if it does not qualify as additional livable space .

Patricia Steiner · Answer

Floridians need to stay out of this discussion because if you dig a hole 4 feet down in our state, you'll hit water or limestone or something that isn't "basement" worthy.  From having lived up North many years ago, the answer is generally no. You can go to the Property Appraiser's site, put in the address and it will show you what the living square footage is and illustrate what that includes.  I don't think you'll like the answer.  Here's a couple things to know:

The bad..."It's not usable, so don't include it in square footage. To be considered “living area,” a home's rooms must meet certain criteria — including the basement. Height clearances, whether it's heated, and the presence of windows: all of these make a space livable."

The good..."a finished basement is an asset to your property value.Valuation is more than square footage so just make sure you let potential buyers know that the basement offers even more space for that prized media room, man cave, more.

Chris Mason · Answer

There are 2 issues at play. 1) The buyer and 2) the appraiser.

I'll focus mostly on number 2.

If it's below grade, an appraiser is not going to include it in gross living area, and they aren't going to call it a bedroom, an ADU, or any of that (in the unlikely event that they do, you got lucky with a very liberal appraiser who gave you a gift, I'd suggest shutting up and not questioning it, hopefully the mortgage underwriter is having an "off" day and doesn't notice, but you certainly don't want to bring attention to it!).

The best you can hope for is that they call it "finished basement space." And they will treat it like a feature. A swimming pool or solar panels is another example of a feature.

For these features, they're going to look for other homes that do and don't have this feature, and calculate if they do or do not actually sell for more, or less.

For the most part, they aren't going to get in the weeds on the feature's features. It's a hot tub or it's not, it's a swimming pool or it's not, it's got solar or it doesn't, it's finished basement space or it's not. "My hot tub has auto-jets on a timer!" and "my solar panels were made by Tesla!" isn't going to move the needle a single dollar on the appraisal, and the kitchenette in your finished basement will likely be the same.

Tough pill to swallow, but for appraisal purposes (I'm not commenting either way on "true" market value, nor am I commenting on cashflow or anything else, this commentary is strictly limited to "for appraisal purposes"), if this indeed the nicest finished basement in the area, you may have over-improved the property.

There's nothing for the county auditor to correct, FYI. Because what they currently have, not counting the below grade finished space as living area, is likely correct, unless your particular county has some extremely unusual building codes and word definitions at play.

Eunice Villarroel · Answer

It all usually depends on the state law. As someone above mentioned in Florida additions are considered part of the square footage if it does have air conditioning/heating and permits for such addition. That is how the state of Florida determines livable space but every state has her own definition of livable space. some states may not function this way.

Rick Turman · Answer

@Nick C. Thanks for the reply.  I feel more at ease about the situation.   I'll follow up with the outcome!

Can Basement be considered part of gross living space

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