Why the appraisal's square footage doesn't match Zillow

It's one of the most common calls after an appraisal comes back: "The listing says 2,600 square feet. Your report says 2,340. Where did 260 feet go?"

Usually nowhere. The house didn't shrink. It was measured by a different set of rules.

The appraiser follows a national standard

For conventional loans, Fannie Mae and Freddie Mac require appraisers to measure detached and attached homes, including townhomes and manufactured homes, using the ANSI Z765 standard on appraisals with an interior inspection and on hybrid appraisals. Listing sites, older tax records and builder plans often rely on other sources and other methods, or simply repeat a number someone entered years ago.

What doesn't count as finished above-grade area

Under the standard, a few kinds of space are reported separately from the home's main finished area, even when they're nicely finished:

• Anything partly or fully below grade. If any part of a level's walls is below ground, that level is reported as below-grade area. A finished walk-out basement still goes in this category.
• Low ceilings. Finished areas need a ceiling height of at least 7 feet. Under a sloped ceiling, at least half of the room's finished area must be 7 feet or higher, and any portion under 5 feet doesn't count.
• Openings to the floor below. The open space above a two-story foyer or great room isn't floor, so it's excluded.
• Finished space you can't reach from inside, or can only reach through an unfinished area, such as a room over a detached garage. It's reported separately as well.

Stairs count toward the floor they descend from. Measurements are taken to the nearest inch or tenth of a foot, and the total is rounded to the nearest whole square foot.

What this means for you

Buyers: be careful comparing price per square foot when the number didn't come from a measured appraisal. Two "2,600 square foot" homes can be very different houses.

Sellers and agents: if the home has a finished bonus room with knee walls, a two-story foyer or a finished lower level, expect the appraisal's number to differ from the listing. Setting that expectation early saves a hard conversation later.

The space that's excluded from the main finished area is still reported and still considered. A finished basement isn't ignored. It's simply valued as what it is, rather than as above-grade living space.