Grade Level
Definition and meaning of Grade Level in real estate.
Grade level is the surface of the ground where a building meets the earth, serving as the baseline for determining whether building elements are above, below, or at ground level. This designation is essential for measuring square footage, assessing flood risk, and determining building code compliance.
In more detail
In real estate, spaces are categorized as above-grade or below-grade, which significantly affects their valuation. Above-grade space refers to the living area located entirely above the ground level, while below-grade space includes basements or walk-out basements. Appraisers typically separate these spaces on appraisal reports, valuing below-grade square footage at a lower rate than above-grade living area.
Additionally, grade level determines the type of construction materials that must be used. For example, concrete slabs at grade level require moisture barriers, and framing near the grade must consist of pressure-treated wood to prevent decay and insect infestation.
Key facts
| Category | Property Types & Construction |
|---|---|
| Also known as | At grade, ground level |
| Impact on Value | Below-grade space is typically valued lower than above-grade living space |
| Watch out for | Moisture issues in building elements that touch or sit below the grade level |
An appraiser evaluates a home and excludes the finished basement from the primary above-grade square footage because the floor is located below grade level.
Frequently asked questions
Is a walk-out basement considered above-grade?
No, in standard appraisals, if any portion of a room's floor is below the ground level, the entire level is classified as below-grade, even if it has a door leading outside.
Why does grade level matter for flooring choices?
Flooring materials installed below grade level are subject to higher moisture levels, meaning solid hardwood is usually avoided in favor of engineered wood, luxury vinyl tile, or concrete.