A raised ranch has a finished lower level three feet below grade with bedrooms and a bath. Under the standard convention, that level is:
Correct Answer
B) Reported as finished below-grade area, valued separately from GLA
Why this is correct: Gross Living Area (GLA) is defined as finished, above-grade living space. Any level that is partly below grade, regardless of its finish or heating, is excluded from GLA. It is reported separately as finished below-grade area and valued on its own line in the sales comparison approach. Why the other choices are wrong: 'Included fully in GLA, since the space is finished and heated' is wrong because being finished and heated does not override the below-grade condition. 'Ignored entirely in the appraisal' is wrong because the space contributes value and must be reported. 'Counted at half its square footage' is wrong; there is no standard half-count rule for below-grade areas. Exam tip: Remember: GLA = above-grade. Below-grade space is valued separately.
Why This Is the Correct Answer
Why this is correct: Gross Living Area (GLA) is defined as finished, above-grade living space. Any level that is partly below grade, regardless of its finish or heating, is excluded from GLA. It is reported separately as finished below-grade area and valued on its own line in the sales comparison approach. Why the other choices are wrong: 'Included fully in GLA, since the space is finished and heated' is wrong because being finished and heated does not override the below-grade condition. 'Ignored entirely in the appraisal' is wrong because the space contributes value and must be reported. 'Counted at half its square footage' is wrong; there is no standard half-count rule for below-grade areas. Exam tip: Remember: GLA = above-grade. Below-grade space is valued separately.
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