Along with issues and questions regarding square footage (living area) of homes, room count and room designation is another “hot topic”. Again, agents often work listings to make them as attractive as possible to a potential buyer – which is what they should do. However, there’s a fine line between exploiting the gray area and misleading buyers. The comments below are based upon my appraisal experience and they are reasonable to use when evaluating a home. Most homes will be evaluated by appraisers as part of the closing package; all parties should be familiar with how they will consider the property.master bedroom in Atlanta

What constitutes a bedroom? Among other things that depends on the age of the home, location of the home, and how comparable homes like it are viewed. There are neighborhoods in Marietta, Atlanta, Kennesaw and other parts of Metro Atlanta that are comprised of homes built prior to the 1940’s. These homes often have bedrooms with no closets – old central heating systems often lacked ducts in each room. Rather than take space with closets that would lack air circulation, clothes were often stored in armoires, cedar closets, or some similar manner. As a small child, we lived in a “railroad” apartment in Brooklyn, NY. There were no doors; you entered in the small kitchen and walked through two “bedrooms” back to the living room. Talk about functional obsolescence….but that floor plan was (and still is) common in that market. Applying current standards to these older homes is impractical as consumer demands have changed. This is a perfect example of why it's critical to use accurate comparables.

There is no required use for most rooms - a bedroom is a den is an office is a pet room. Most rooms serve multiple purposes but there are general industry guidelines for defining a room. And there are clear definitions as to what constitutes living area.

It is reasonable to expect the following in “modern” bedrooms:

  • a closet
  • a window
  • a ceiling height of 7’ or more
  • a dedicated, securable entry with no “thru” traffic
  • area enough to accommodate a small bedroom set

This list isn’t exclusive; common sense will come into play. One big question in the Atlanta real estate market are “bonus” rooms being called bedrooms. Typically located over the garage, these rooms can work as bedrooms, offices, play rooms, media rooms….use depends on your needs.

What constitutes a dining room? Common practice (and common sense) is to call it a dining room if it is a definable space suitable for formal dining. In my view, this is a walled room that is adjacent to or near the kitchen, with defined entry and exits. A dining area is typically off the kitchen and is a space suitable for informal meals. This area is open to the kitchen and the traffic flows unobstructed.

The most common issue seen in this market is the liberal use of "bedroom" and inclusion of finished basement areas into the room count and living area. While functional, consideration has to be given to how an appraiser will define things or misunderstandings could arise.

What constitutes a finished terrace? This is a bit of a word play as in the Atlanta market this is usually a finished basement. In most parts of Metro Atlanta, we have the luxury of rolling terrain that affords us the ability to have partially above grade basements. Natural daylight, exterior entry doors, high ceilings….these things combine to make finishing the area very worthwhile. But – DO NOT EXPECT THIS AREA TO BE REFLECTED IN THE LIVING AREA OF THE HOME. It’s common for agents to include finished basement rooms in the overall room count. This area must be heated and cooled by a permanent source and must be “finished” in a manner minimally consistent with area norms. Finished surfaces on the walls, ceilings and floors – permanently heated and cooled are usually minimal standards. Many agents and owners also include this area in the square footage of the home. This is inaccurate; if an agent does that they are either misleading you or they are ignorant of industry requirements. CLICK HERE FOR HOW TO MEASURE A HOME.

finished basementDoes finished basement area “count”; does it add value; is it included in the appraisal? Yes, yes and yes. ANY finished area that is less than FULLY ABOVE GRADE is considered finished basement. Appraisers will use comps with similar finishing and the area will be reflected outside of the gross living area in the basement section. Adjustments for size, quality, condition, etc will be made to the comps based upon comparison with the subject. This can get dicey with finished basements, but consider the challenges of appraising some mountain or lake homes where the majority of the living space is technically below grade…

So is a bathroom with a shower stall a full bath? Again, look at it through an appraiser’s eyes as they will have a role in the transaction. In my experience a full bathroom is any with a tub/shower combo, a separate tub and shower, or a shower stall. Bathrooms with tubs only are tricky; current standards would consider that functional obsolescence but those are seen in older homes. Powder rooms or half baths are typically a toilet and sink.

Keep in mind that a buyer's requirements for a home supersede an agent’s description. That bonus room might serve as a bedroom, a bedroom as an office, or the dining room as a play room. Sellers need to see their home though the eyes of the market. If that loft is open to the family room then call it a loft, the room in the back of the basement with no windows and no closet might not be a bedroom even if its used it that way. Don’t get dramatic about what a room is or isn’t called – all that matters is what works for the family occupying the home.