Can you count an enclosed patio as square footage? I had a real estate agent ask me this question recently, and the answer was going to make a huge difference in the value and pricing strategy for an upcoming listing. The agent did not want to include the enclosed patio as square footage, but the seller did.
Question: Does a permitted “enclosed patio” built back in 1970 count as sq footage in a home? Tax records does not reflect any extra sq footage, but of course the owner wants to add 400 sq ft to the MLS listing.
Answer: An enclosed patio usually does not count in the square footage unless it is more like the home than not. The fact that it was built in 1970 is not the issue, but rather the quality of the enclosed patio is a big deal. Enclosed patios often have a lower quality compared to the rest of the house, and they don’t usually have the same feel as other parts of the home either. Moreover, they often don’t have a heat source, which is essential for any space to be considered square footage. In cases like this, a buyer would likely walk in to the enclosed patio, and think “This is a nice enclosed patio”, instead of “Wow, look at the 400 extra square feet of living space.” We have to keep in mind how buyers would view the property because if they don’t think of it as square footage, they won’t pay the same price per sq ft for the enclosed patio as they would for the rest of the house. On the other hand if the quality is very high, it feels like the rest of the home, and it has a heat source, it can sometimes be included in the total square footage (as was the case in the last photo below). Ultimately I would say the majority of enclosed patios are just that – enclosed patios. Not living space. This means in most scenarios enclosed patios are NOT included in the total square footage by appraisers. This does not mean they cannot contribute to the appraised value, but only that they are not considered as living space.
Keep in mind various portions of the country might have different rules for enclosed patios, so be sure to know your local code and how buyers perceive the market too.
NOTE: Photos in this post are not of the home in question, but rather of two different homes in the Sacramento area.
I hope this was helpful.
Question: Any further insight, questions, or stories to share?
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Great post Ryan.
Thanks so much David. I appreciate that.
You bring up a good point, ,Ryan. And it leads to questions about heating, cooling and ventiltion. I’ve seen plenty of houses in Lake County that have ancient floor heaters and no ac, or perhaps a portable unit hung in a window. Sometimes there are claims about heating by enclosed fireplaces or pellet stoves. Similarly, one sees vaulted ceilings with no insulation at all. You suspect that the houses might be expensive or impossible to adequately heat or cool at all times of the year. And, an energy assessment by a local utility ( usually free) should reveal much about thermal efficiency. All this should also be an important consideration in the asking price.
Thanks Ricardo. That’s all part of the value package. Those things can make an impact. Part of it of course depends on the level of knowledge a buyer has. First-time buyers unfamiliar with energy issues may not really know what to look for, which can impact what they pay. Yet anyone who has purchased a home and had issues with temperature is likely to pay more for a home that is more adequately tightened up from an energy efficiency standpoint. No AC almost anywhere in California is a painful thing. My in-laws live in Huntington Beach, and they don’t have AC in their house because it was not built with AC back in the 1960s. But let me tell you, it gets hot in the summer there – even with the ocean breeze blowing through the subdivision.
Exactly. You would think that the Department of Real Estate would require agents to educate buyers about thermal issues. All the engineers I know were very focused on thermal efficiency when they shopped houses.
I hear you. Education is out there, but it’s a matter of doing the homework. Part of the role of an experienced agent can be to help buyers understand what to look for, and to point out issues. This is one reason why buyers should get a home inspection and an appraisal too. Yet part of the issue when buying for the first time is there is less accumulated wisdom for newbies because wisdom only comes with experience. A buyer might purchase something that is less energy efficient or even a certain adverse location, only to never make that mistake again in the future. It would be easier if life and real estate didn’t work on a trial and error basis, but it just does. 🙂
You could try it for year round use in Maine, but bundle up Ryan! No not at all here, need more for year round use. Great site BTW.
Nice Rob. I can assure you I would freeze in your area. My wife and I actually visited Maine a few years ago. We went to Portland and then we took a boat tour through a nearby port town (the name escapes me). What a beautiful place. Thanks for the comment and the kudos.
Great idea for a blog post Ryan. In my years appraising, I’ve come across many enclosed patios that, before research, I’m not sure how the typical buyer would see it (e.g. the same as GLA or something less).
Thanks Gary. Research sure can make a difference. I go into situations all the time where I have an idea about something, but then after research I have a completely different opinion. I should say most enclosed patios I’ve come across have not been regarded as living area, but there are some that have.
If the Real Estate agent’s role is merely to show houses and help with paperwork ( much like am automobile salesperson ) what makes them worth 3% of the purchase price?
That’s a loaded question, Ricardo. I think I’ll let any agent onlookers answer that one. I will say a good agent knows how to negotiate and should be able to save a client money and most importantly get the deal done. The agent definitely carries liability, but is hopefully also coming to the table with expertise, guidance, wisdom, a knowledge of the market, and a power to negotiate that helps get the best possible deal for the buyer or seller. Those things are all very valuable. Of course if those things are lacking, it’s hard to argue against your point. I get it though too at the same time because it’s painful to fork out so many greenbacks for a service like this. Been there. Will be there again. As I look to buy in the future I will hope the agent is at least able to save me what I had to pay (sort of the same way I view my tax man). Part of the deal is the agent might have to split the commission with the office though too, which can hurt. I’ll say from experience watching agents is that the ones that are very well established are doing extremely well, but there are many who struggle and who are living paycheck to paycheck like many other people. I heard an ad on the radio the other day about getting a $5K advance loan, and the example the ad used was a real estate agent needing the money. Interesting choice by the advertiser.
One more note on what Ricardo was getting at. There is definitely conversation to be had about agent commissions in light of buyers doing so much more of their own leg work these days. I don’t think I gave enough emphasis to the point. With the advent of so many online tools, and buyers feeling like they are doing more work, it ultimately causes some to challenge commissions – right or wrong. This will be an important and interesting conversation to follow in coming time, and it’s a big reminder for real estate professionals to watch the market carefully, evolve over time, and constantly grow in market expertise.
Another thing I look at too is the roof line because some enclosed patios have flat type roofs that don’t flow with the rest of the roof system. I’ve got a home I am doing right now where the owner enclosed the covered patio but he did a very good job with it and I am including it in the square footage. It has heating and cooling and similar finish as the rest of the house and it does not feel like you are in an enclosed patio.
Well said, Tom. Thank you for sharing the example. I think the roof line is key. It certainly feels more like square footage when the roof is similar.
Great post! Those things are all very valuable. As when I look to buy in the future I will hope the agent is at least able to save me what I had to pay. Great Info.
Thanks Bill. I appreciate it.
All I wish in an agent would be the conscientiousness I see in Ryan.
The other day I went with the wife to buy her a new car. We had already done our reserach and knew what model we wanted. We had a price from Consumer Reports. The quiet young salesperson who helped us simply told us the TrueCar Price the dealership was letting cars go for. It was $1200 less than CR. He just sold a car.
Then when we got the Car Alarm scam ( they wanted $490 to activate our alarm with a special code) he advised against it. You can get a very good alarm for $150 [this used to be the rust proofing/floor mat scam –after sale sales]. I guess my point is, you want somebody on your side not just somebody trying to move ‘inventory’.
Well said. Having a client’s best interest at heart is key for anyone that is truly supposed to represent that client. It’s too bad when a check gets in the way.
Covered patio. My opinion if no permit don’t considered it at all it doesn’t matter if it’s nice or it was done well.Very simple the answered is no don’t considered it so if the owner sell the house and if no permit it will count as square footage so so the appraiser will not be in trouble later on. When we bought our house the owner told us the enclosed patio doesn’t have permit take the house or leave it. I really like the enclosed covered patio so I bought the house and I enjoyed the extra space. Thank you it’s a ll depend on the appraiser!
Any additional it was done on the house will not be considered square footage If no permit. Just case something happens later it will not be covered very simple. So if there was a permit count as square footage. My neighbor is putting a nice enclosed covered patio and it was ready to have appraise according to them the enclosed covered will not cover as square footage because no permit as simple as that
Thanks Aries 64. I appreciate hearing from you. As I said in the post, part of the issue comes down to quality. Sometimes companies will sell an enclosed patio to the owner with the idea of “it will add 200 sq ft to your house instantly”, but it’s really still an enclosed patio. It could be permitted, but if it does not have a heat source, has a much lower quality than the rest of the house, and feels like a patio more than living space, it’s definitely not going to be counted. While the permit is a big factor, it’s presence isn’t always the determination for whether something is square footage or not.