Glossary of Terms
Above grade refers to the finished living area of a home that is at or above ground level, typically including the main and upper floors. Below-grade areas, such as basements, are reported separately even when they are fully finished and heated.
In an appraisal, above-grade square footage, room, bedroom and bathroom counts are distinguished from below-grade space. Comparable properties are evaluated with that distinction in mind, because two homes with the same total finished square footage can have different valuations when one has more of its space below ground.
This distinction matters when determining a property's market value, listing price or eligibility for financing. Sellers who include finished basement space in advertised square footage may find that the appraised above-grade square footage is lower. Keeping above- and below-grade areas separate also helps lenders, appraisers and buyers make more consistent comparisons between properties.