Loft is GLA or not?

[Terrel L. Shields]

A loft is often counted in the GLA by Realtors and Assessors. It is hard to tell but in most Log homes, you can bank on it being more a "loft" than a full upper level, even if the walls are 8'....and to me, it seems like it sells that way.

Do you treat GLA to includes such lofts or finished attic rooms, or segregate them from the GLA?


I am doing a 1 sty log home, nice 12 yr old. I found one 12 yr , 16 yr and 25 yr old - all in similar shape. When I made adjustments in my sensitivity analysis, I came up with a $5 SF adjustment....not reasonable.

So I went back, did the age first, adjusted, and still a 'flat curve' indicated it could be $0, $5, $10... So I looked at my #2 comp- the only 2 story. The wall is not tall. It has do be that the 900 SF is a loft and so a call later, yep, it is a fairly low wall, so I deducted the SF out of the GLA, treated it as "other area" and adjusted my sale prices accordingly, and $35 per SF fell out of the sensitivity grid.... far more reasonable and by doing so solved the problem. Nevertheless, I cannot say that it isn't really GLA as fannie defines it...but it appears the market is defining such areas as "other"....and marking down accordingly.

 

[Meandering]

Here,

Lofts are GLA. We get some pretty big lofts too.

My daughter's house, we put up a wall at the open end of the loft, and now it is a bedroom, which does not detract from the rest of the home, but for the price of a wall and a closet, she has a bedroom addition which would not have been possible without the loft.


.

 

[Mike Garrett RAA]

I have always said...if you can walk on it...it is probably GLA at least IN MY MARKET.

 

[J Grant]

If people can stand up in it and use it as living space, why wouldn't it be GLA? I normally include it in GLA and it is typically recorded as GLA on public records (in my area)

Log houses...dont' see too many of them here. Did one last year it was super high quality, had a large loft used as a family room was included in GLA

 

[Terrel L. Shields]

So if you have two houses of similar size, age, and quality, one as a 2 sty. One as a loft and the loft house sells for $48/SF and the 2 sty sells for $65/SF you reconcile that how?
Ask any builder. A loft is cheaper to build.

 

[Tom Woolford]

ANSI standards are for anything over 5 ft clearance be included in GLA, but 50% must have clearance 7 ft or better.

 

[J Grant]

So what if a loft is cheaper to build? Cost does not equal value. Houses are sold as a package. Typically a oft is a builder option, some buyers want it and some won't . Same on resale...some buyers like the open multi use space, others wont' choose a house with a loft. The ones that choose a house with aloft are not going to figure that it cost $15 less a sq ft to build and deduct that amount from their offering price.

Certain portions of homes cost more to build or have more detail than other portions of the house. .

 

[Terrel L. Shields]

Every builder would build a loft if selling by the SF and you could get X dollars per SF regardless cost. Lower costs allow builders to build larger houses for the same money. That will translate into cheaper per SF homes. Same with one with a minimum number of rooms. A 2200 SF 3 bed, 2 bath home is likely to sell for much less than a 2200 SF house with 4 bed, 3 baths.

This was the problem

$122,000 1,040 SF
$167,000 2,690 SF w detached shop 960 SF was a loft.
$170,000 1,660 SF w detach garage

 

[J Grant]

Why are you separating areas of a house out that cost less to build per sf for a market value appraisal? I can see it in cost approach but not in resale comparison

as far as including a loft in GLA, lower or higher cost to build per sf is not the criteria for inclusion in GLA as far as I have been taught to consider it...GLA is living area under heat and air that a person can stand up in min height etc.


II can see it perhnaps as a cost approach if you want to be more accuratge and account for a bit of lower cost to butue

 

[Terrel L. Shields]

Why are you separating areas of a house out that cost less to build per sf for a market value appraisal?

Why wouldn't you? Don't you separate out the basement? Garage? outbuildings? Do you use Voodoo to estimate SF adjustments.

Clearly, the larger home is selling for less per SF than the others which are about the same age and apparent quality on sites that are quite similar in utility and value. So why is that? It is my opinion it is because they are more inclined to value the footprint of the building as living space (since borrowers have no real concept of "Gross Living Area" - a construction of the appraisal biz...) and the loft, like the bonus room or the basement are valued at a lower metric.

There is no explanation for the price of that one comp except something we call GLA is not being fully valued by the customer....so you either have to throw it out as a comp with an unexplainable "low" value or you have to try and estimate why it is cheaper ...My conclusion based on the sensitivity analyses that I ran, pointed to the loft as the likely reason. Valuing the loft at a much lower unit cost, brought the analysis in align and tightened up the adjusted sales prices by a huge chunk.