House Square Footage vs. Useable Square Footage: A Helpful Guide

What is Included in Square Footage of a House?

There are times when the listed square footage of a home does not necessarily equal the same amount of usable space as another home with the same amount of space listed. When looking at houses, you may see and feel that a home that is listed with less square footage than another can actually seem more spacious. 

This can happen for a few reasons. First, the layout and features of the home can cause it to be more or less open and functional. A home with radiator heating units in each room, multiple doorways, and large bay windows can often be more restrictive for how furniture can be laid out. In contrast, homes with open layouts, lower-profile heating and cooling vents, and more standard window formats can create a more accessible flow that makes the home feel bigger.

Size and square footage discrepancies can also happen because technical square footage is different than usable space. A house may have a sizable unfinished basement, unventilated attic, or crawl spaces that add to the actual area of the home, but not necessarily to the amount of space available to live in.

Putting a Price on Square Footage of Your Home

When a home is appraised for the mortgage value, appraisers will often only count livable space. For example, if a basement, crawl space, unfinished area, or attic was added to the stated square footage of a 2,200 square-foot home listed at $300,000, but the appraiser finds 800 fewer square feet of livable space, the home may only appraise for $280,000. The mortgage loan amount is dependent on the appraised value of the home, so in this example, the buyer may have to negotiate with the seller to match the appraised value in order to secure a mortgage loan for the full amount. If not, the buyer may need to come up with additional funds to cover the appraisal gap, or may even have to walk away from the home altogether. Make sure you have a clear understanding of the home’s square footage by talking with your realtor. 

Basements are the most common disconnect for square footage discrepancies. Depending on where you are buying a home, there are legal definitions around livable space that require spaces like a basement to be finished, heated and ventilated, partially or fully above-ground, and to have an entrance or exit to the outside for safety reasons. Without these features, the basement may not be included in the appraisal of usable space in the home and might need to be brought up to code to consider them as part of the home’s space.

Even if a partially or fully finished basement, attic area, or other space does not meet legal requirements for livable space, it can still hold value to the homebuyer depending on what they plan to do with it. When you select the home that is right for you, work closely with the realtors, mortgage team, and inspector to fully understand what is livable and usable space, and what will be counted in an appraisal.

The local Summit Federal Credit Union Mortgage Team is ready to help with questions related to home values, the appraisal process, and how to help the mortgage application process go as smoothly as possible during your homebuying journey. Contact us today.