The NAR building and the U.S. Capitol in the b...

The Carolina Multiple Listing Service recently revealed a new MLS system coming in early 2014.

The CarolinaMLS Board of Directors approved the recommendation of the CarolinaMLS Search Task Force in June, 2013. One of the recommendations was to say “goodbye to square-foot ranges” (their words).

Well, regardless of which side of the tape you’re on, one would imagine that it is more “transparent” to both Buyer and Seller to have the actual square-footage. That is of course if the actual square-footage is truly the heated living area.

It appears that the Realtors will have to start measuring again – either themselves or have it done for them. As an Appraiser, it would seem an appropriate time to come to terms with how the heated living area (HLA) is measured.

If one looks at the tax records, mls data and appraisals - it is apparent that we as an industry need some uniformity. Today’s parties to real estate transactions have more resources than ever before. As such, they can go to these sources and plainly see the disparity.

Much of the disparity is in how the measurements are defined. In appraisal practice, heated living area is defined as that area “above ground” which is heated and finished with walls, flooring, electrical et al. Many times a house with a basement has square-footage of the basement considered part of the HLA if it is finished, when it is not. It is below grade, therefore is not considered to be HLA even if it is finished to the degree of the living area above grade.

The below grade area should be reported as such in all reporting. If this is done consistently throughout each segment of the real estate industry there would not be the inconsistency we have today.

Please understand that not counting below grade living area as HLA, if done consistently in all fields, will put each style and design of house on par. Also, please understand that the below grade living area should be calculated. It does have value, just not the same value per square foot as above ground living area.

Another issue that is taken with measurements of houses is the height. In other words, if the height above the floor area is less than 5 feet, that area of the floor below the 5 feet is not considered HLA. So in a room that has a tapered ceiling, only the floor area which is below the 5 feet or higher ceiling counts to HLA.

I would hope that we as an industry could find a way to resolve this inconsistency for our sakes and, just as importantly, for the Buyers and Sellers. In the meantime, I would suggest that anyone who measures a house for informational purposes be versed in the correct way to measure. The ANSI standard for Single Family Residential buildings is what is used for their SFR reports. If a real estate professional is aware of this method, great. If not, I would hope you find the time to learn it. If you don’t have the time for whatever reason, please engage a knowledgeable person which will utilize the standard to measure for you.

A service we perform is measuring houses. If you would like information or pricing for this service please send an email to me at k.j.mullen@valuingmetrolina.com or call me at (704)517-2085. I am happy to provide the information to you.

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Case-Shiller Reports Continued Erosion in Home Prices

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