How to calculate gross living area digitally
The past two years have been unlike any other for the real estate industry. Skyrocketing interest rates and rapidly appreciating home prices have tanked buyer confidence. Real estate agents are flipping the script on traditional listings and exploring new methods to attract buyers. One of the most under-used features of a listing is a floor plan.
Potential buyers likely scroll through dozens or hundreds of listings while searching for a home. More than half of these buyers find a floor plan very useful, according to the National Association of Realtors. Listings with floor plans stand ahead of the competition and help potential buyers visualize their future in a home.
But calculating gross living area (GLA) to generate a floor plan is no walk in the park. Traditionally, the process is arduous and involves measuring square feet, sketching, and calculating. But now, appraisers can take advantage of new floor plan technology to calculate digital GLA in as little as five minutes.
What is gross living area (GLA)?
Industry professionals often define gross living area as the total, finished, above-grade living space. Finished basements, walk-out basements, finished attics, and partially below-grade areas are usually not included in the gross living area. GLA is calculated by measuring the outside perimeter of the structure.
The American National Standards Institute (ANSI) has documented guidelines for calculating GLA in single-family homes and residential properties. Both Fannie Mae and Freddie Mac require appraisers to use these guidelines when generating appraisal reports. These measuring standards are called ANSI Z765. ANSI’s guidelines include stipulations for staircases, ceiling height, and more.
How to calculate gross living area
Using ANSI Z765, appraisers measure, calculate, and report above- and below-grade square footage to determine GLA. These standards require that all floor plans must be computer-generated, indicate all dimensions necessary to calculate the square footage of each level, and show the calculations to demonstrate how the square footage was derived.
If done manually, the calculation process can be prone to error. Using a digital tool to measure GLA and generate a floor plan makes the process much more efficient. Enter: CubiCasa.
What is CubiCasa?
CubiCasa is a digital floor plan generation app that’s available on the App Store and Google Play Store. CubiCasa’s floor plan app is easy to use and can scan a floor plan in as little as five minutes.
CubiCasa’s Digital GLA product is aligned to the same ANSI standards required by both Fannie Mae and Freddie Mac. CubiCasa is widely used for Property Data Collections, Hybrid Appraisals, Desktop Appraisals, and Traditional Appraisals.
In 2021, CubiCasa’s GLA accuracy was reviewed by both GSEs (Fannie Mae and Freddie Mac) and approved for use in their appraisal modernization programs. Since then, CubiCasa has been used hundreds of thousands of times on Property Data Collections that are continually reviewed by the GSEs, Lenders, AMCs and individual appraisers who rely on the results.
Are CubiCasa floor plans accurate?
First, it’s important to recognize that the traditional methods of GLA calculation are not perfectly reliable or consistent. Hand-drawn sketching methods — even from a highly trained appraiser — can be impacted by human error, and inconsistencies in process or standards from appraiser to appraiser and market to market.
To quantify this phenomenon, Clear Capital identified recent properties where it had performed two different appraisals on a home within one year of each other, by two different appraisers. We can then compare the variation in GLA between the two appraisers.
As you can see, there is a ~4% difference in GLA between two appraisers, and almost 5% of properties ended up with two different GLAs that were more than 15% apart. With this in mind, let’s take a look at CubiCasa’s reliability.
Measuring CubiCasa’s reliability
Determining how reliable a data source is for measurements comes down to two primary factors:
- Ground truth reliability. How close to “ground truth” is it?
- Consistency. How consistent is it from property to property?
Below are internal CubiCasa studies performed in 2021 that measure these factors. These findings have previously been shared with Fannie Mae and Freddie Mac.
Ground Truth Reliability Testing
On a sample of 55 properties, a trained Clear Capital Property Data Collector measured and sketched a home using traditional hand-drawn methods and performed a CubiCasa scan on the same property.
Goal: Ensure that CubiCasa’s calculations closely mirror those produced using traditional measuring methods.
On a sample of 50 properties, two different untrained individuals scanned the same property using CubiCasa. Prior to this test, the participants had never used CubiCasa.
Goal: Ensure that the results are relatively consistent from a CubiCasa scan, no matter who is performing the task.
The results from these studies imply that CubiCasa is superior to traditional appraisal methods with respect to reliability and internal consistency.
When the GLA output from a digital floor plan solution like CubiCasa differs from some other source — such as a prior appraisal, public records or MLS — it’s important to review those cases in detail to identify where the differences stem from, and determine which source appears more credible and reliable, given the information available. We provide in-depth calculation details in the Digital GLA product to ensure our users can perform that level of assessment when needed. Many of those other sources of data will not offer the same level of auditability.
This is not to say that CubiCasa will always be perfectly correct; nor should we expect that from any source of GLA, as evidenced by the variances seen when two appraisers calculate GLA on the same property.
The most important thing is that we deliver a reliable and consistently calculated result, and it’s clear from the studies above that this is the case with CubiCasa.
Calculating gross living area with CubiCasa — superior to a traditional appraisal