Digital GLA used in Clear Capital's hybrid appraisal aligns to ANSI measurement standards
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Digital GLA used in Clear Capital’s hybrid appraisal aligns to ANSI measurement standards

By September 21, 2021 No Comments

As appraisal modernization and digitization initiatives take hold, it’s now more important than ever to standardize the calculation of a home’s gross living area (GLA). With the technology available today, it’s certainly strange that GLA and square-footage measurements can still be somewhat subjective, especially since square footage is the second-highest driver of a home’s value (the first being location). Efforts to increase consistency and accuracy in the property data collection and inspection process should be celebrated, and are key to improving public trust in the appraisal process.

Today, we’re pleased to introduce our alignment to the American National Standards Institute (ANSI®) Z765 standard for the digital GLA produced by CubiCasa through our ClearInsight™ app. CubiCasa’s digital GLA is an essential component in our hybrid appraisal process — what we call Modern Appraisal — and our alignment with ANSI standards will help minimize appraisal inconsistencies and reduce potential bias in the appraisal process. It’ll also help build confidence in the accuracy of hybrid appraisals.

You might be thinking, “Wait, what’s ClearInsight again?” ClearInsight is our proprietary mobile app that enables highly efficient and precise property data collection for use in hybrid appraisals. The app empowers property data collectors with multiple tools, including photo capture, guided questionnaires, and the ability to produce an automated floor plan sketch and digital GLA from a quick smartphone walk-through, powered by CubiCasa’s technology. Using the ClearInsight app, property data collectors with little prior training can intuitively use their smartphones to collect property data, which can then be used to produce an automated and accurate floor plan sketch and calculate digital GLA to ANSI standards. The days of needing months of training to produce accurate GLA are now history.

Since square footage is one of the most significant contributors to a home’s value, following a universal standard and accurately capturing dimensions is essential to producing an accurate appraisal all stakeholders can rely on. Our alignment to the widely accepted ANSI standard allows everyone involved to use the same terminology to communicate and calculate square footage, making it an item of agreement rather than introducing the potential for friction.

To claim alignment to the ANSI standard, many measurements and calculation methods must be followed when quantifying square footage. Let’s briefly explore those requirements.

 

Calculation methods

The ANSI standard describes a method of measurement that makes it possible to obtain accurate and reproducible measurements to calculate the square footage of a single-family home.

Detached single-family finished
The finished square footage is based on the measurement of the exterior finished surface of the outside walls.

Figure 1 — This example shows a standard single-family home and the inclusion of the exterior walls in the GLA. The areas depicted in green are included in the GLA. Both the interior and exterior walls are colored either red or green to show their inclusion or exclusion as living areas.

 

Attached single-family finished
The finished square footage is based on the measurement of the exterior finished surface of the outside walls or from the centerlines between houses, where appropriate.

Finished areas adjacent to unfinished areas
Where finished and unfinished areas are adjacent, the finished square footage is calculated by measuring the exterior edge or unfinished surface of any interior partition between the areas.

Figure 2 — The property has a screened porch and a garage, neither finished nor included in the GLA. The exterior walls separating the areas are included in the living area of the primary dwelling.

 

Openings to the floor below
Openings to the floor below cannot be included in the square footage calculation. However, the area of both stair treads and landings proceeding to the floor below is included in the finished area of the floor from which the stairs descend, not to exceed the area of the opening in the floor.

Figure 3 — Large open-to-below areas are represented as non-living areas in red. This example shows a large area on the second floor that is open to below.

 

Figure 4 — When multiple open-to-below areas are present, all will be represented with a red area and separated from the living area.

 

Above- and below-grade finished areas
The above-grade finished square footage of a house is the finished area for all levels that are entirely above grade, while the below-grade finished square footage of a home is the finished areas for all levels that are wholly or partly below grade.

Figure 5 — The finished area is separated from the unfinished area in basements. This example shows a basement where most of the floor is finished, but a small portion is not. They are differentiated by color, and the square footage is provided separately.

 

Ceiling height requirements
To be included in finished square footage calculations, finished areas must have a ceiling height of at least seven feet (2.13 meters). There are a few exceptions noted in the standard.

Figure 6 — When areas with sloped ceilings do not meet ANSI standards, they are still shown but removed from the GLA. This example shows a low ceiling being removed from a small upper floor living area.

 

Finished areas connected to the house
Finished areas connected to the house’s main body by other finished areas such as hallways or stairways are included in the finished square footage for that level. Finished areas that are not connected to the house in such a manner cannot be included in the finished square footage.

Garages, unfinished areas, and protrusions
Garages and unfinished areas cannot be included in the calculation of finished square footage. Chimneys, windows, and other finished areas that protrude beyond the exterior finished surface of the outside walls and do not have a floor on the same level cannot be included in the square footage calculation.

Figure 7 — The property here has a garage, protruding fireplace, and storage area in the garage, which are not finished. For each of the unfinished portions, the area is represented but not included in the living area.

 

Figure 8 — In this example, you can see both the chimney and attached garage are shown but colored red to show they are not included in the GLA and have their own area totals.

 

Statement of Finished Square Footage
To fully comply with the ANSI standard, the Statement of Finished Square Footage must also meet specifications regarding declaration of rounding, reporting of above- and below-grade areas, areas not considered finished square footage, interior spaces not inspected, plan-based methods, and other methods.

 

Reliability is key

A clear and consistent standard for calculating square footage (such as ANSI) is paramount for the credibility of valuations. It increases public trust in the accuracy of an appraisal. Without a universal standard, questions may arise regarding the credibility of valuations, assessments, data analytics, and homebuying decisions.

By ensuring Clear Capital’s hybrid appraisal process has built-in alignment with the ANSI standard for calculating digital GLA with ClearInsight™ and CubiCasa, we’re strengthening the product’s reliability, minimizing risk, and reducing friction for stakeholders that adopt hybrid appraisals in the mortgage industry.

As we continue our journey to modernize valuations, we’ll hold on to our promise from day one: to go wherever it leads and do whatever it takes to serve our customers with remarkable technology and uncompromising service.

 

To learn more about our hybrid appraisal, contact us at 530-550-2525 or visit our product webpage.

 

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ANSI is a trademark of the American National Standards Institute, Incorporated.

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Dan McAlister

Author Dan McAlister

Dan McAlister is the director, product management — field valuation products at Clear Capital.

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