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Appraising Split & Bi-Levels…Where The Ground Meets the Wall

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When it comes to appraising split-level and bi-level dwellings, trying to calculate the gross living area (GLA) can be tricky. If you’re trying to figure out what the gross living area of one of these types of homes is, there are some important things to consider. For example, where the ground meets the exterior wall of a particular level.

In real estate, the line at which the ground intersects with the foundation of a home, is called a grade or grade line. Did you know that where the ground meets the exterior wall of a level, can have a direct impact on value? How so? Let’s get down to the nitty gritty of it, shall we?


Let’s look at Fannie Mae’s definition for GLA. The following information was taken directly from Fannie Mae’s 2019 Selling Guide. (Click here for link) It states the following:

“The appraiser should use the exterior building dimensions per floor to calculate the above-grade gross living area of a property. For units in condo or co-op projects, the appraiser should use interior perimeter unit dimensions to calculate the gross living area.

Garages and basements, including those that are partially above-grade, must not be included in the above-grade room count. Only finished above-grade areas can be used in calculating and reporting of above-grade room count and square footage for the gross living area.

Fannie Mae considers a level to be below-grade if ANY portion of it is below-grade, regardless of the quality of its finish or the window area of any room. Therefore, a walk-out basement with finished rooms would not be included in the above-grade room count. Rooms that are not included in the above-grade room count may add substantially to the value of a property, particularly when the quality of the finish is high.”

That is clear, isn’t it? If the level of a home is partially below grade, that is, partially below the ground, it is generally not considered to be GLA. So, in a split-level or bi-level style dwelling, any levels that are partially below grade are not included in the GLA. In this situation, it doesn’t normally matter whether or not the partially below grade area can be used as usable square footage.  What about three level splits in which there is a lower level that is partially below grade, and then another level that is below grade? In this case, both the partially below grade areas as well as the below grade areas are  considered to be basement area, not GLA. In this instance, it means that the split-level property has a larger basement, more like a ranch style dwelling with a full basement. In the case of a three level split, the basement areas are just split into different below grade and partially below grade levels.

Now there are exceptions to this rule. For instance, unique properties such as berm homes, or other homes with unique styles. Here is a little video that shows some unique homes that may be exceptions to the rule, under certain circumstances. However, your traditional split and bi-level homes are generally not going to fall into this category.


What does FHA have to say regarding GLA? The following was taken from FHA’s 4000.1 Handbook (Click here for link):

“Gross Living Area (GLA) refers to the total area of finished, above-grade residential space calculated by measuring the outside perimeter of the Structure. It includes only finished, habitable, above-grade living space.”

It goes on to say,

“The Appraiser must: Identify non-contiguous living area and analyze its effect on functional utility; Ensure that finished basements and unfinished attic areas are not included in the total GLA; and use the same measurement techniques for the subject and comparable sales, and report the building dimensions in a consistent manner.

When any part of a finished level is below grade, the Appraiser must report all of that level as below-grade finished area, and report that space on a different line in the appraisal report, unless the market considers it to be Partially Below-Grade Habitable Space. In the case of non-standard Properties and floor plans, the Appraiser must observe, analyze, and report the market expectations and reactions to the unique Property.”

FHA’s guidelines are like Fannie Mae’s, when it comes to GLA. However, FHA guidelines do state that if the “market considers” the “Partially Below-Grade” area to be Habitable Space, then that area may be considered to be GLA.

If the appraisal is being completed based on FHA guidelines, and the partially below-grade area is considered to be “Habitable Space” by the market, and it is being valued as such, it cannot also be counted as basement area. In this case, it’s one or the other. Keep in mind that the ability to include the partially below grade area in the GLA is for “non-standard Properties and floor plans”. In my opinion, traditional split-level and bi-level dwellings would NOT fall into this category, as they are standard styles in the market.

I would not recommend including the partially below grade areas in the GLA, even if it is acceptable to do so, unless the comparable sales you are looking at are very similar in terms of style. For instance, if you are trying to price a berm home, use other berm homes. Often, GLA issues and pricing become more problematic when homeowners and real estate agents use homes with styles that are different from the subject property. 

In addition to reading Fannie Mae and FHA’s GLA standards, I would also recommend looking up the American National Standard for Single-Family Residential Buildings. (ANSI Z765-2013) This is another measurement standard that many appraisers use. If further supports the information in this article. Under the heading “Above and Below Grade Finished Areas”, this version of ANSI states the following:

“The above-grade finished square footage of a house is the sum of finished areas on levels that are entirely above grade. The below-grade finished square footage of a house is the sum of finished areas on levels that are wholly or partly below grade.

For these standards, even if the area is partially below grade, it is considered to be below grade. That is, basement area.


Here are some examples of split-level and bi-level homes. This first picture reflects a bi-level home in which the lower level is partially below grade. Notice that it offers a walk-out basement. In this example, the GLA would generally only consist of the areas that are completely above ground.

Split Level Below Grade
Bi-Level With Partially Below Grade Lower Level

Here is a picture of a split-level in which the lower level is partially below grade. (On the right side) The partially below grade area to the right is not considered to be GLA due to its being partially below ground. Even if it is a walk-out basement in the back.

split level partially below grade
Split-Level With Partially Below Grade Lower Level

Occasionally, I will see a bi-level home in which the lower level is above grade. (If you walked around this home you would see that the lower level is above grade on the rear and sides as well. If this is the case, I would include the lower level in the GLA, because it is above the ground. In this example, there is no basement.

Split level no bsmt
Bi-Level With Lower Level Above Grade

Here is a picture of a split-level dwelling in which portions of the lower level are above grade. There is a partial basement that is completely below grade.

split level all above grade
Split-Level With Portions of The Lower Level Above Grade



Let me share with you an experience that I had, not too long ago, that further demonstrates why it is important to have an accurate understanding of a home’s gross living area.

I appraised a split-level property for a purchase. My client was a bank and this was going to be a Fannie Mae loan. My opinion of value was around twenty-five thousand dollars below the contract price. Why so much lower? It was all about the GLA!

It’s important to note that this particular split-level property had been renovated about three years ago. It was listed on and off, since it had been renovated. Originally, it was listed in the 150’s, then raised to the 160’s. Over a period of three years, it never sold. (That should tell you a little something about its market value.) Then, it was recently listed again in the upper 160’s and sold in the mid 170’s. Not surprising! It had great market appeal because of its renovations. And, due to the extended shortage of inventory we have had in recent years, buyers are desperate to find homes that are turn-key.

The County Auditor reflected this property as having 1,200 sq. ft. of GLA. It was listed as such. It was also listed as having four bedrooms and one and a half bathrooms. During my inspection, I measured this property and found that it only had 960 sq. ft. of GLA. The other portions were either partially below grade, or completely below grade, including one of the “bedrooms” and the half bathroom. Therefore, instead of being a 1,200 sq. ft., four bedroom, one and a half bath home, it was actually a 960 sq. ft., three bedroom, one bathroom home.

Using several different methods, I estimated the market price per sq. ft. to be $70. The difference between 1,200 sq. ft. and 960 sq. ft. was about $17,000. Based upon my research and analysis, the difference between having one full bathroom vs. one and a half bathrooms, in this area, was around $3,500. To add insult to injury, the property only had a one car garage versus most homes in this neighborhood having two car garages. Based upon my research, the difference between a one and two car garage was around $7,000. By the way, the subject property is also located on a street that experiences heavy traffic.

My opinion of value for this property was considerably lower. I used very comparable sales, one of which was on the subject street. The others were located on comparable streets. All were comparable to the subject. Interestingly, if the subject’s GLA, bedroom and bathroom count were as reported in the MLS and public records, the sales price would have been in the ball-park of the contract price.

Clearly, getting an accurate gross living area calculation is extremely important to obtaining an accurate opinion of market value! As I demonstrated in this article, much depends on how much of a home is below or partially below the dirt!

Many people I have visited with, including seasoned real estate agents, often do not understand what is considered to be gross living area. I highly recommend that all real estate agents carefully read through Fannie Mae’s 2019 Selling Guide and the FHA 4000.1 Handbook. Both are free and accessible on the web.

I hope you found this information helpful! Please don’t hesitate to call me or another appraiser in your area if you have questions about what constitutes gross living area. We are here to help! And if you are looking for an appraiser outside of Northeast Ohio, please check out There, you can search for a qualified, independent appraiser in your area.

I have updated this article with an episode from my podcast, Home Value Stories. In it, I cover some of the same information as I have shared in this article. I hope you enjoy it! Click here to listen.

Home Value Stories Logo


If this article on splits was a total snoozer for you, enjoy this video of another kind of split. Enjoy!


Thanks for being here! Have a great day!

Here are some links to other articles and videos I enjoyed recently! I hope you will also…

Buckle Up: Rates Are Falling and Housing Market is Confused – Housing Notes by Jonathan Miller

The invasion of tech companies in real estate – Sacramento Appraisal Blog

Do Birmingham Home Appraisers Set Local House Values? – Birmingham Appraisal Blog

Is An Industry Standard for Property Inspection Necessary? – George Dell’s Analogue Blog

Frank Lloyd Wright Fixer; Spreadsheet Shackles; Homes under $100,000 – APPRAISAL TODAY

What is a comparable sale – Ann Arbor Appraisal Blog



21 thoughts on “Appraising Split & Bi-Levels…Where The Ground Meets the Wall”

  1. Hi Jamie,

    Great post. Out here in California I have few homes with basements to deal with so this is less of an issue. I had one years ago that was a high quality home built on a hillside. Two feet of one wall in the living room was below grade but the rest of the home was above grade. Instead of reporting the living room as a basement, which made no sense in this case, I included it as living space based on typical market reaction-no one in this market would consider it a basement. My client, a portfolio lender, was ok with this approach.

    1. Thanks Joe! In that situation, Fannie Mae and FHA may consider that as GLA due to the situation. This would be a “non-standard” property. It sounds like a pretty cool home! Out here we have lots of basements, but few mountains, much to my chagrin. 😃 Looking forward to taking George Dell’s class with you next month!

    1. Haha! Thanks so much Shannon! I find that these are the two styles of homes that are the most commonly misunderstood by the public when it comes to GLA. I’m glad you didn’t find it to be a snooze fest. That video was pretty crazy! 😃

  2. Thanks Jamie. I haven’t taken a look at the updated Fannie Mae Seller’s Guide, but the old guide stated appraisers in some situations could deter from the general rule of not considering a basement as living space. Does the new guide address this? In other words, if the market counts it, the appraiser can count it. It can get sticky to show this is reality of course, but to be fair I find sometimes when we are so dogmatic about rules we can sometimes not see the market plainly as buyers would. What do you think?

    1. Hi Ryan! Fannie Mae’s guidelines do allow for considering partially below grade ares as GLA. However, this is for unique properties. Personally, I would not consider a split-level or bi-level style as being unique (most of the time). I think that if we are consistent with the way we determine GLA, this is key. The problems, in my experience at least, usually occur when there are no comparable split or bi-level comps. When we use a different style, things get tricky. I know that the tone of my post this week is rather dogmatic. It was not really meant to be. That being said, we must abide by certain guidelines, like for Fannie Mae, FHA or VA, when performing appraisals that require that we abide by them. That was really the main point I was attempting to make here. In my example, In this article, the property had not sold for several years at a certain price. That’s a reflection of the market’s reaction. I think the market participants, in general, felt that the GLA was smaller than the MLS reflected. However, one buyer was found that was willing to pay more. I agree with you though that sometimes the guidelines we may have to follow may, at times, not match the views of some market participants. That’s exactly why finding and using the most comparable sales is vital. Thoughts?

      1. I am an agent in Northeast Ohio and I sell many splits and bi levels (I even live in a split! Lol). The rule does not reflect the reality of the market though. I think most people consider the lower level of a split or bi level as true living area if it is finished. I especially think that lower level bathrooms should 100% count in these types of homes! I witness it frequently that a buyer will pay more and prefer a home with an extra bathroom even if it’s below grade! As long as it’s a true “finished space” and not just a toilet next to the laundry sink lol. I think the rules do not reflect the true market. And isn’t that the point? You are appraising a home for the lender so they know that the home is being sold at the true market value. Plus when inventory is low and the home sells in multiple offers, the price can shoot way up despite the rules, but it is in fact the true market value because many buyers were willing to pay the price. I think multiple offers should be a huge factor in making exceptions to the rules. Also if several comparables sold with the lower level being counted and lower level bathrooms being counted then that should have a huge influence as well. I find that most splits and bi levels are sold with the finished lower level living areas being factored in. At least here in Northeast Ohio. Don’t you consider that?

      2. Hi there! Thanks for writing in. I appreciate your thoughts on this topic! I do believe that the standards we follow as appraisers reflects the market. Think about this. If I am appraising a split-level or bi-level home, and using truly comparable split-level or bi-level homes as comparable sales, and if I consider their living areas with the same consistency as I am to the subject, how is this not reflective of the market? Actually, it’s most reflective of the market. The problem is that often, these partially below grade areas are counted as both GLA and basement area. That’s not consistent nor reflective of the market. I have appraised many thousands of homes, and I see this over and over. What is perceived to be gross living area, cannot also be basement area. It’s one or the other. Often, this thought is overlooked. So, to your point, if an agent is including this partially below grade area in their GLA estimates, then to really reflect the market, they would want very comparable split-level homes. If they use very comparable split-level homes, and treat these areas consistently, this is clearly the best indication of the market. There’s a lot of double dipping of these areas in the minds of many.

        Hopefully that makes some sense. Honestly, there’s a lot to consider, and I’ve just touched the surface of it.

  3. Hi Jamie, I too am in Calif, bedroom community north of SD and SE of LA. We have a gated lake community where a lot of homes are built on downslopes, which creates all sorts of issues. The market has a private lake and some lots have stairs down to boat docks, this can become tricky, others have downslopes with views of the lake and or mountains. But because many of these type of properties exist and the market doesn’t either understand or care about Fannie or Freddie, they just want the view or lake front, the market looks at this as GLA. Now in defense of Fannie, Not my first thing I like to do, usually one wall is below grade (side closet to street), then the side walls very quickly go from below to at grade (downslope). No se hablo “Basement” out here. First time in there, 25 years or so ago, it was a knock down dragged out battle, but after multiple phone calls with agents, then multiple phone calls with two reviewers, finally got everyone on page with the fact that the market couldn’t care less about what the GSE thinks, they are looking at it as gross living area with not even a hint of basement. Course periodically an east coast lender shows up and then the fight is on again, until I go through the whole nine yards and get them to understand what the market is saying. Course even though my comments are in the narrative addenda, the lender can still have a heart attack and want to run me and the report up the flag pole. Good article, glad I don’t have to think to hard about split level homes as they typically don’t exist out here. We just seem to like concrete slabs with stucco and tile roofs. Take good care.

    1. Thanks so much for writing in! The situation you are describing is one of those unique properties in which Fannie Mae would likely allow to consider as GLA, even though it is partially below grade. That is a very different scenario. I have appraised some homes on Lake Erie, that sound very comparable to what you are describing, and I did include the partially below grade areas in the GLA. In my area, split and bi-level properties would not be considered to be unique like these other properties. This is a really tricky area. I think the key is consistency. If I am appraising a split or bi-level home, I work very hard to make sure I am using the same styles for comparable sales, if possible. Then, I am reflecting the market. Too often, when it comes to split and bi-level homes, at least in my area, there is a tendency to include the partially below grade area in the GLA and then still also count it as basement area. When this happens, it’s misleading. Lot’s to think about for sure. Thanks so much for sharing your experiences! Have a great day!

      1. Thank you for this article, as I came across this yesterday. I’m in west Texas where, if there is a hill, someone will built a house on it. Usually, with a portion of the structure being below grade. Invariably another appraiser, at some point, has included the below grade portion in the GLA. Therefore, the central appraisal district has also included the below grade portion in the GLA. Therefore, when I make a statement that the portion below grade IS NOT in the GLA, all hell breaks loose. Fortunately, this property was a VA assignment. In the GLA area of VA Pamphlet 26-7, dated 02/22/2019, “If the appraiser determines that a partially below-grade habitable space is similar to the GLA in design, quality of construction, and appeal, has full utility and is accepted in the market, the appraiser may include the area in the GLA.” So……I included it.

      2. Hi Terry! I don’t do VA work, so I am very glad you wrote in! Sounds like you did the right thing. Since the VA allows for it, that’s cool. Of course, if you’re including that area as GLA, then you cannot include that area as basement area, as I know you know. But what you did sounds totally legit. It’s good to hear from you! I know this is a loaded topic. I certainly hope I didn’t sound totally dogmatic in my article. As you nicely pointed out, sometimes that partially below grade area can be included in the GLA. It depends on the guidelines we have to follow for that particular assignment. Explaining what we did and why we did it is huge. Thanks so much for writing in! Readers greatly benefit when individuals like yourself, write in to explain these differing situations. I truly appreciate it! Have a great weekend!

  4. Understanding this to be an old post but none of the other appraisers ask your opinion. Lets say that the MLS listed the subject several years back as a Bi-Level but included the “Basement or below grade areas” in the total GLA. Let us also consider that the county record also includes the same area as total GLA. If it is common for both the Realtors and the county records to include the below areas as GLA do you or do you change these records to reflect that they are below grade areas?

    1. Great question! Thanks for asking. Even if the auditor and Realtor include the partially below grade areas in the GLA, I do not. Many auditors and Realtors typically do not use any type of measurement standards, while appraisers do. That being said, if the appraiser uses comparable split-level dwellings for comparable sales, and they treat each consistently, the appraiser’s opinion should be in the ballpark of reality. There are some unique situations in which an appraiser might include those partially below grade areas as GLA. When this happens, there needs to be some sound reasoning for doing so. And, if the partially below grade finished sq. ft. is included as GLA, then it can no longer be included as part of the basement sq. ft. Often, I see double dipping. A listing may include these areas as both. Hopefully, that answers your question. Thanks for writing in!

      1. But if the realtors, auditors and buyers/sellers all considered the below grade finished areas while they considered the purchase price and a buyer indeed paid the higher price for the home with the below grade finished spaces factored into the price then you should also consider it into the value because if you truly compare, buyers in the market are paying for that below grade finished area. That is if you find comps that are sold with the finished lower level adding to the price. That is solid proof that the market is accepting it as gross living area.

      2. Sorry for the delayed response. I would like to point out that we do consider finished lower level areas in our value. If I am appraising a split-level home, which has a finished below grade or partially below grade area, and we use comparable split-level homes to develop our opinion, then we reflecting the market. However, sometimes a person will try comparing a ranch or colonial to a split-level. That’s when we get into trouble with GLA. Let’s say as a Realtor is trying to price a split-level home. And say they include the partially below grade finished area in their GLA. Then they search for comparable split-level dwellings. And they consistently include those same areas as GLA. Whether the appraiser considers those partially below grade areas or not, will not matter because they will value those areas consistently as well. If they are the same, then the market is being reflected. I can’t stress how important being consistent is and using very comparable homes in terms of style and size. If you do, than this is not an issue.

        Hopefully that makes sense. I get where you’re coming from. I really do! And as appraiser’s we do consider all of these things. There is a lot to consider. If you’re struggling to understand this, please don’t hesitate to call me. I would be happy to visit with you about it in a friendly conversation. I think I can offer some things that might help. I’m always open for a chat. My best to you! I really appreciate your writing in. I know that your thoughts reflect the thoughts of many.

  5. if a slab home (no basement) is embedded 1.6 feet in the ground with exterior walls measuring only 5.6 feet high above ground, is this considered below grade? a realtor is arguing with me over this

    1. That’s a great question! Based upon ANSI Standards, it is below grade, even if it’s only 1.6 feet below the ground, which is going to be problematic for a Fannie Mae or Freddie Mac loan. The catch is that the market is going to consider that area as living area and so we would appraise it accordingly. However, in the appraisal reporting, we would have to explain the situation in detail.

    2. Hi Kevin! I did want to mention something regarding this situation. Since I wrote this article, Fannie Mae has begun requiring that appraisers measure homes to ANSI Standards, as you know. There are certain homes, like berm homes, which they do allow an exception as to how it is reported in the appraisal report. However, as I mentioned, we always still appraise to the market. I just thought I would clarify this.

      1. thank you for your response, in speaking with multiple realtors in that market area, they indicated that the buyer pool would be same and would consider this similar to a slab home.

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