A note on industry terminology: The answer below includes terms like Gross Living Area (GLA), above-grade, below-grade, and finished areas. These are standard industry terms used by appraisers and defined by organizations like ANSI and Fannie Mae. We include them here so agents and buyers can speak the same language as their appraiser — but you won’t see these distinctions on an Open Homes floor plan. Our plans operate on a straightforward binary: every area is classified as either Living Space or Non-Living Space. That’s it.
According to ANSI, a “Finished Area” is “an enclosed area in a house that is suitable for year-round use based upon its location, embodying walls, floors, and ceilings that are similar to the rest of the house.”
The ANSI Z765 standard — currently the 2021 version — is what appraisers use to measure and calculate single-family homes. A few key rules:
Above grade vs. below grade
A basement is any area partially or fully below grade, regardless of finish level. Even high-quality finished basement space must be reported as below-grade finished area — not GLA.
Ceiling height requirements
To count toward GLA, a finished area must have 7 feet or more of ceiling height. In rooms with sloped ceilings, at least 50% of the finished area must reach 7 feet, and no portion under 5 feet can be included. Any finished area that fails to meet these requirements must be reported as finished non-GLA under the new URAR (Uniform Residential Appraisal Report), which is the standardized form appraisers use to document and justify a home’s estimated market value for the lender.
Measurement rules
Measurements are taken to the outside walls, to the nearest inch or tenth of a foot, and reported to the nearest whole square foot. Staircases count toward the GLA of the floor from which they descend.