Posted by: The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

35 responses to “Misleading Total Square Footage from NWMLS Includes Unfinished Basements by Design”

  1. Drshort

    I have a 1000 sq foot unfinished basement. Its a great space for a shop, working out, storage, etc.. Including it in the total sq footage is a little misleading, but so is leaving it out.
    And I dont like finished vs unfinished as the deciding factor. The majority of finished basements in older seattle homes are pretty gross and barely livable. I’d much prefer there be a distinction between above ground and below ground sq footage.

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  2. masaba

    Tim,

    This, along with the number of days on market, is one of the most misleading stats in any NWMLS listing. When my wife and I were looking at houses 2 years ago (we ended up not buying and are still dirty renters) we were appalled by what agents tried to pass off as ‘livable square footage.’ One agent tried to tell us that a basement area that looks exactly like the one you have pictured could be used as a play area for our kids. Believe me, I can’t make this stuff up.

    Another thing that is very misleading is the quality of a finished attic or basement. Some of them are garbage, you can tell that the owner just threw down some carpet, put up some paint, added a shower, and called it a finished basement. Some of them have low ceilings, and no matter what is done, the area should never be counted as livable square footage. Others are very nice, professionally done, and should be added to the livable square footage. The only way to know this for sure is to visit the house because, rest assured, any inch that the listing agent can squeeze out of a house will be added to the square footage.

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  3. masaba

    RE: Drshort @ 1

    Dr Short, I don’t think that it is misleading at all to leave it out. The home is 1500 sq ft with a basement. There is nothing at all misleading about that. I know exactly what to expect when I get to the home, 1500 sq feet of living space and a basement.

    The way they do it now, squeezing out every inch, leaves it as absolute guesswork until you get there.

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  4. masaba

    And in case you can’t tell, this is one of the things that bothered me most when I was looking at houses in Seattle. Of course, this was 2 years ago, so the insane prices bothered me a little more.

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  5. Cristian

    There is a simple way to find the right information. Using Redfin, there is a section that says “Public Facts”. This segregates finished sqft from unfinished sqft. In a large number of cases, “finished sqft” corresponds to livable space above the ground, whereas “unfinished sqft” corresponds to poor quality basement space.

    Regrettably, there is no automagic option on Redfin to use the “Public Facts/Finished Sqft” as the default metric instead of the NWLMS creative numbers.

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  6. The Other Ben

    By masaba @ 3:

    RE: Drshort @ 1The way they do it now, squeezing out every inch, leaves it as absolute guesswork until you get there.

    Either way leaves guesswork. Really what they should do is publish both numbers. But when you think about it, counting unfinished space is closer to the actual value than not counting it. The cost to finish unfinished square footage is definitely less than half the cost of adding an entirely new addition to the house. If it were more than half the cost I would say it would be better to not include it.

    That being said, I think everyone understands that there’s a significant possibility that a listing is less good than it appears. Given the option between having an “over promise” or “under promise” standard, I think “over promise” is more in line with what listings usually are anyway…so it’s not that confusing.

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  7. Kary L. Krismer

    It isn’t an advantage to the agent or the seller. Having someone be disappointed when they see a listing isn’t a good thing.

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  8. Kary L. Krismer

    “I also spoke with a coworker in real estate operations here at Redfin, who explained to me that while the NWMLS listing forms agents use to enter listings into the system include separate fields for finished and unfinished square footage, only the total of the two fields is supplied by the NWMLS in their feeds.”

    This is actually good to know, and something I hadn’t noticed before. Just another example of the consumer sites not being as good as the agent tools! ;-) (And yes, that’s a joke since it is apparently the NWMLS feed, but the reason I hadn’t noticed this before is it’s not a problem when searching Matrix.)

    I think I’ll just leave the unfinished blank from now on, and mention it in the marketing remarks.

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  9. Kary L. Krismer

    BTW, this raises another issue. What number is used when doing price per square footage calculations?

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  10. Ira Sacharoff

    By Kary L. Krismer @ 9:

    BTW, this raises another issue. What number is used when doing price per square footage calculations?

    It’s the total square footage that’s used in price per square foot, including the unfinished basements.
    So I don’t put a lot of stock in price per square foot numbers, because they’re not all that consistent. It doesn’t mean a lot. A house might be less expensive per square foot than another of the same ” size” but it might have a basement with five foot tall ceilings and a big furnace and lots of ductwork and no windows. And of course that home will have the staged photographs of the cute living room with the bright blue Czech sky in the background, and the distorted galley kitchen which looks like you could feed a family of nine. But no pictures of the rodent infested, mildewed basement.

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  11. Willy Nilly

    An appraiser with 30 years experience told me that finished basement SF is valued at 1/2 of what standard SF value is (full basement as well as daylight). So if 2 houses are identical (size, age, quality, location), with one being above grade, and the other having 50% of the SF being finished basement, the basement house would have a value of 25% less than the one above grade. This may not always play out precisely in the market or in transactions but at least it can be used as a reference for comparison.

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  12. Kary L. Krismer

    RE: Ira Sacharoff @ 10 – I’ve never paid much attention to price per square foot of other reasons.

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  13. Packet

    Funny enough, this is the exact reason I never ended up buying in Seattle proper. Too many homes listed for what I was looking for, only to find off it was actually 1,000sq ft less than that and had basements with a 6ft ceiling.

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  14. David S

    RE: Kary L. Krismer @ 12 – I do. As a buyer I am paying VERY close attention to $/sf. I also have to spend the extra time measuring and verifying square footage to my own satisfaction. That exercise is done with the listing SF, King County SF and my calibrated measuring instruments. PITA. But yes, I pay close attention to the details.

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  15. Kary L. Krismer

    As I mentioned in the prior thread where this came up, there are three places an agent enters square footage. On one screen they have a total square footage, and then on another screen they break it out into finished and unfinished. I just discovered I have a pending listing that I neglected to add the unfinished basement number, so the total and the finished equaled each other. I just corrected the listing to indicate the unfinished square footage, but left the total at what I consider the correct number (finished). On the NWMLS report for the listing, it still shows the square footage number as the finished number. We’ll see what Redfin and some of the other sites do with it tomorrow, after they will presumably have updated their data.

    BTW, this entire system could have worked differently prior to the Matrix system going into effect earlier this year.

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  16. softwarengineer

    LOL Tim, Interesting Take Today

    The SF estimates totally ignore other factors too:

    Split levels and colonials have about 400 SF wasted stair space vs a rambler.
    A large two story high cathedral ceiling living room looks nice to some, but gives you more air to heat/cool and you can’t live in the empty air loft….the SF estimates won’t error here, the winter power bill will though.
    Sometimes the garages are converted to family rooms and added in as SF, yet ask any appraissor….the house is worth less without a normal unfinished garage.
    Do they add mother-in-law apartment cottages as extra SF???? LOL

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  17. Gustopher

    At 6’6″, I quickly learned to just ignore any house where the listing mentioned a basement, finished or otherwise. The livable space was always tiny.

    Perhaps I missed out on a great property somewhere, but I doubt it.

    Before giving up on anything with a basement though, I did get to see a house the advertised 1 3/4 baths — upstairs was a perfectly fine little bathroom, and in the “finished” basement there was a toilet, sink, shower… and no walls. (True enough, it did not advertise 1 3/4 bathROOMs)

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  18. Polly

    By Gustopher @ 17:

    At 6’6″, I quickly learned to just ignore any house where the listing mentioned a basement, finished or otherwise. The livable space was always tiny.

    Perhaps I missed out on a great property somewhere, but I doubt it.

    Our 1964-built daylight basement has standard-height ceilings and my 6’6″ father has no problem being there. We remodeled our basement a couple of years ago and it is the nicest, most-used area in the house. Be careful with those “always” and “never” words. ;-)

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  19. cranky cynic

    Last year I went to an open house in View Ridge. The rambler was advertised as something like 2200 sq feet, but exactly half of that was in the basement. Although the ceiling height was OK, and there were a few tiny windows, there was a furnace and ducts all over the place. Worst of all, though, was the fact that the basement was not accessible from inside the house. There was a separate entrance in the back. They also had the washer & dryer down there. So if you wanted to do laundry, you had to walk out the front door, walk around to the back yard, and use the separate outside entrance that took you down to the basement. Without the sq footage in the basement, it was a very tiny house.

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  20. wreckingbull

    During the bubble, in places such as Ballard, with a smaller-sized, lower-quality housing stock, spending a bunch of money on finishing a dank basement with a 6″4′ ceiling was very common. The real crime was that now you don’t have a real basement to do things like put your table saw. For some reason, this one really got me fuming, like masaba. A basement is a basement.

    http://www.toptiertactics.com/wp-content/uploads/2010/05/340x_custom_1220548573196_Being_John_Malkovich_floor.jpg

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  21. Dave0

    It included such interesting tips as measuring the exterior of the home over the siding to determine the total square footage, and to include stairs as “living area.”

    That is the correct way to measure square footage on a house. Here is a quote from my real estate appraisal textbook (Fundamentals of Real Estate Appraisal, 10th edition), page 166:

    “For a single-family detached residence, size is described in terms of gross living area, defined as the total amount of finished habitible above-grade space, measured along the building’s outside perimeter.”

    So you are correct, basements, attics, crawlspaces, etc. are not to be included; but interior stairs, outside walls, siding, insulation, etc are included.

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  22. Dave0

    By Willy Nilly @ 11:

    An appraiser with 30 years experience told me that finished basement SF is valued at 1/2 of what standard SF value is (full basement as well as daylight). So if 2 houses are identical (size, age, quality, location), with one being above grade, and the other having 50% of the SF being finished basement, the basement house would have a value of 25% less than the one above grade. This may not always play out precisely in the market or in transactions but at least it can be used as a reference for comparison.

    That appraiser is wrong. There are no blanket rules saying such and such adds/subtracts such and such amount of value. Everything is looked at on a case-by-case basis and must be backed up by data in the market. In order for that appraiser to be right, he would have to find two houses, exactly the same, except one was all above grade and sold for 25% more than one that had 50% of the SF below grade. Even then, that would only apply to houses in that neighborhood, with that SF, with that age, etc.

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  23. Kary L. Krismer

    RE: Dave0 @ 21 – What’s crazy though is if the NWMLS actually told agents to do this. I had a client once that thought his house was bigger than the county said, and I had him get an appraisal to indicate that. He was right, and getting an appraisal gave us something to point to besides a tape measure.

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  24. Geordie Romer | Leavenworth WA

    I’d also like to add that I would probably call the space in the picture a “crawlspace” and not an unfinished basement. 3-4 feet tall with visqueen on the floor is not a basement.

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  25. ARDELL

    Seattle is one of the ONLY areas in the Country that does not merely say “plus a finished basement” without calculating the finished basement areas as part of the home’s square footage. 1,500 sf plus a finished basement is more accurate. Also a “daylight basement” means at least one end of it is at ground level, and has sliding glass doors to the outside. But some people think a little window with some light coming in makes it “a daylight basement”.

    As to the basement level being valued at 1/2 the $ price of the main level…not so. I have seen a basement valued by an appraiser for as little as $10 per square foot.

    Always use the King County Tax Record to determine the square footage per each level of the home before viewing the property, and never value the bedrooms in the basement the same value as bedrooms on the floor above the kitchen level. The value added for basement rooms is a fraction of the value for main floor and “bedrooms up”. Would you put your 2 year old in the basement if your bedroom was on the second floor? No. For that simple reason…it does not carry the same value as a bedroom that is elsewhere in the home.

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  26. wreckingbull

    RE: Geordie Romer | Leavenworth WA @ 24 – I am pretty sure that photo was humorous hyperbole. It is OK to laugh a bit. Otherwise you cry.

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  27. Kary L. Krismer

    Tim, is it correct to assume that Redfin would have updated by now where I updated my listing at just after noon yesterday? If so, adding in the unfinished square footage didn’t change the total reported. So the feed is apparently of the ASF input by the agents, and not the sum of the finished and unfinished.

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  28. Anonymous Coward

    Umm. Isn’t the point of having a buyers agent having somebody who can check the place out before you do? I.e. so that their time is wasted figuring out which listing is really 1800 sqft and which ones are 900 sqft of house and 900 sqft of uninhabitable space?

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  29. David S

    RE: Anonymous Coward @ 29 – I’m still going to count it myself. Buyer’s agent, listing agent, King County, Listing Detail, only a good starting point at best. I’ll do my own arithmetic. That goes for loans too. I’ll do my own math on the loan too. It’s ridiculous.

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  30. Brady

    Good post Tim. It has always been very frustrating. On every listing I have to verify with county records (realist) to see how much is finished. It is a hassle. Why can’t NWMLS include both numbers (finished and unfinished)? We may have to petition that.

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  31. Kary L. Krismer

    By Anonymous Coward @ 29:

    Umm. Isn’t the point of having a buyers agent having somebody who can check the place out before you do? I.e. so that their time is wasted figuring out which listing is really 1800 sqft and which ones are 900 sqft of house and 900 sqft of uninhabitable space?

    As I mentioned above, when an agent searches they will search by the finished number, and their main reports will show the finished number.

    That’s why I never understood why so many people here were complaining about this over-reporting of size. It’s only a problem on the consumer sites, and personally I think it should be corrected.

    That said, if the consumer wants something more, like David S, they’re going to have to measure it themselves. I’ll hold the other end of the tape measure, but that’s about it.

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  32. David S

    RE: Kary L. Krismer @ 32 – Well thank you sir! :-)
    I just have to be cautious. I am going to measure a listing this weekend, a rambler, 1840sf county, listed at 2200sf with the 900sf addition. It’s just fuzzy math on the square footage all around. Kudos to Tim for spot lighting it.

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  33. Teacher_Greg

    This is a topic that is long overdue! Thank you for bringing it up. In my 4 year search I basically just started subtracting the basement square footage whether it was finished or not to figure out how much living space there was. Lets be honest, in most of Seattle finished basements are dark, damp and filled with spiders. Not really someplace you want to spend a ton of time if you have other options.

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  34. How to Calculate the Square Footage of Your Home - Redfin Real Estate Blog

    […] no official laws that govern this process. In addition, some Multiple Listing Services (MLS) report all finished and unfinished square footage as one number, adding to the confusion. Since the rules aren’t standard, some listing agents just […]

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