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Appraisal Measurements - Accuracy & Consistency

by Administrator on Feb 25, 2009 General Appraisal 1316 Views

Until you have been involved in a litigation case that deals with the measurement of buildings you won't begin to appreciate just how little attention is often paid to builder measurements, assessors measurements and the measurements completed by appraisal professionals.

Many residential appraisers will point you to the following definition for measuring buildings: Gross Living Area (GLA): "Definition: Total area of finished, above-grade residential space; calculated by measuring the outside perimeter of the structure and includes only finished, habitable, above-grade living space. Finished basements, attic areas and casitas are not generally included in total gross living area. Local practices, however, may differ."  Use: This definition is accepted by federal agencies for the measure single-family properties. Source: The Appraisal of Real Estate, Appraisal Institute, 12th Edition, Page 226).

Problems can begin to crop up when people reference plans, marketing brochures prepared by builders, assessment information and other secondary sources that are asserted to be accurate.  Buyers may have been sold their home based on a representation made by the builder, the broker or the party reselling a building.  I have seen cases where each of those sizes are different and the appraisal indicates another conflicting size.

One of the reasons that building measurement differences occur is that actual building measurements can be different from those that were planned.  Architectural drawings are often close to the actual size of the building "as built" but appraisers often find that there are differences between the plans and the actual build-out.

Another reason for differences between a current measurement and past documents is that some buildings are changed. Many have had small or large additions, and some have seen partially or totally finished areas added within the previously unfinished garage.

How the building measurements are made provides a classic controversy for appraisers, builders and assessors. Many appraisers measure to 1/10th of a foot as noted on their tapes or laser measuring devices. Some round to the nearest foot, others round to the nearest 1/2 foot and finally some just don't round their measurements at all. Computerized drawing programs often are set to default to the nearest foot or 1/2 foot, so even if your measurements may have added 4/10ths of a foot across a 60 foot side of a building, the computer program that was used for the sketch may have inadvertently rounded off the 4/10ths making the buildings area smaller.

Commercial property appraisers often find that areas represented in leases do not reconcile with the actual measured areas.  When dealing with office condominiums, some owners will claim that common hallways, common baths or common reception areas are part of the square footage that they purchased, and the legal description may even include the common hallway.  

It is important to measure a building when it is appraised using a consistent technique and a measurement tool that you are familiar with, and it is important to remain consistent with regard to your rounding.  If you are in a metropolitan area, all of the appraisers won't be using the same technique, but finding out what your peers are doing is important.  You don't want to be the only appraiser in town "doing it your way" when you should be doing it the same as your peers.

2012 Update:  See our article on Photometrics, and don't forget that many buildings don't have 90 degree corners and thus are not perfectly "square" nor do most have perfectly "square" corners. 

It's probably not a bad idea to place a blub in your limiting conditions statement that you are using "typical appraisal techniques" to measure a building improvement and note that a measurement by an architectural firm would provide more accuracy. 

2013 Update:  On complex buildings I have seen appraisers hiring architects to provide the actual building size.  Why not be able to point to a building design expert when you know there is already a controversy regarding building area?

For more appraisal information contact Glenn Rigdon, MA, MRICS, ASA a Las Vegas / Henderson Nevada appraiser via email or via his business website Horizon Village Appraisal (http://www.horizonvillageappraisal.com), or you can also click on “Contact Us” on the home page of this website.   

Article source: http://www.appraisalarticles.com/General-Appraisal-Articles/453-Appraisal-Measurements-Accuracy-and-Consistency.html

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