What Does Below Grade Mean?

Below grade in real estate is a term that describes a space that is below ground level – usually referred to as a basement.

Real Estate Agent Explains Below Grade

Below grade areas are usually referred to as basements, but the definition is more specific than that.  That is, the floor itself is below ground level. It doesn’t matter how much of the space is above ground, though. You could have a basement floor that is only one foot under the ground and it would still be a below grade floor.

Some buildings such as split-level houses may have more than one floor below grade. Here is an example:

A drawing showing which levels are above and below grade on a 4-level split

A drawing showing which levels are above and below grade on a 4-level split

Here you can see that there is more than one floor below grade. This 4-level split technically has 2 basement levels. Even if

Why Does It Matter?

Below grade status is important for the same reason above grade status is – that square footage isn’t counted on real estate listings. You want to know where everything is in relation to the ground. A basement is not the same as an upper floor and so on paper, labeling things below grade gives some more detail about the home’s layout. Having three bedrooms above grade and one below is much different than having them all on an upper floor.


by +Alan F Macdonald REALTOR® | Copyright © – gimme-shelter.com

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Alan F Macdonald

Author Alan F Macdonald

Alan F Macdonald is a real estate agent with Maxwell Challenge Realty in Edmonton, Alberta.

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Join the discussion 18 Comments

  • Lisa Miller says:

    Hi. I just wanted to know what happens if the property is on a hill. For example, what if a room would be below grade on one side, but on the other side it opens up to a patio that is ground level.
    What if the same floor on the same side is at or above grade in one room and below grade in another, both on the same side? (I may be imagining this. But it seemed to be the case.) (Is AT ground level considered above grade?)
    Thanks if you answer: it’s the first time I heard this term and I Googled it. Thanks for reading.

    • Alan F Macdonald says:

      Hi Lisa,

      It doesn’t matter if the ground slopes or not if the entire floor is below grade. But if there is a walk-out basement, the entire floor could be counted as above grade space. (at least in our jurisdiction). AT grade is considered above grade. And if it isn’t a walkout, I would count what is above grade as above and what is below as below in that area. So maybe half of the house’s basement area is above grade – that would be counted as above. The rest would be counted as below.

  • xrb says:

    What if the grade is sloping? so on the same drawing above with the same layout but the grade is sloping downwards left to right? will the lower levels still be considered below grade?

    • Alan F Macdonald says:

      Hi xrb,

      Anything below the level of the soil would still be below grade. If part of the floor is above, then it could be counted. But a hill in itself, doesn’t really change anything. It’s where the floor lines up. Is it below or above? That’s all that really matters.

      • xrb says:

        Hi Alan, thanks for the response. Here’s the side photo of the property. I hope this helps out with my question. Is the first level really below grade? As you can see it’s either, grade is sloping front to back or you have 2 ground levels? One side of the first level is below grade, the sides are partially below grade but the back has a walkout to a backyard. Also, garage is on the opposite side with a side access road sloping down. We’re looking at this property for purchase but wanted to make sure all the GLA will be counted. There are other 3 properties already built with similar configuration but zillow.com does not show sq footage or inconsistent descriptions (ie. one was studio, one was 3bd 3 bath with additional BRs??) Thanks in advance!

        https://scontent-b.xx.fbcdn.net/hphotos-xfp1/t31.0-8/10668743_10202991826415858_1534806178385453042_o.jpg

        • Alan F Macdonald says:

          Hi xrb,

          I see better here what you mean. Those areas that have the floor above grade should be countable. Some jurisdictions might count the entire floor as above grade if it is a walkout basement at all – but not all people will agree that this is fair. From the photo, it looks like more than half of the basement can safely be counted as above grade square footage. I hope that helps!

  • Matt says:

    Hi,

    So with this in mind, if I see a property listing that states 4+3 bedrooms for example, does that mean in total it has 7 bedrooms and that 3 of them are just in the basement?

    • Alan F Macdonald says:

      Hi Matt,

      Yes, that is the conventional way of writing that 3 of the 7 total bedrooms are just in the basement. Bear in mind though, that the 4 ‘upstairs’ bedrooms could be on the main floor or second storey (if it is a 2-storey house) and in any combination – they are just labelled as above grade, but their specific location is not mentioned.

  • ron burdette says:

    Alan- I live in Columbia, Maryland- USA in a split level home and recently my entire lower level was not counted in the Homes square footage because the front of my house sits three feet below ground while the side and back are at ground level, with a walk out in the rear.
    I understand the below grade thinking, but what if I was to hire an excavator to dig out a three foot deep, three foot wide “trench” across the front of my home, causing the lower front on my house to be exposed and therefore “at ground level”. Would the 1200 sq ft of lower level then count as “living space” ? That would double my living space and generously increase my appraisal and may be worth the expense of the work.

    • Alan F Macdonald says:

      Hi Ron,

      Thanks for the comment! This action may qualify you for a higher stated above ground living space, yes. However, your home will not change, so it will not likely be worth any more when selling – it will just be an outlier in the split level category. If people are solely buying based on square footage, that may work, but they will likely compare (in real life) your house to others that they see that are like it and feel the space is no larger – which is true. So I am not sure it would be worth the expense. In a vacuum it may work, but with comparisons all over, I don’t think it would. The designation is really meant so that you can compare houses on paper between styles before you go see them, but not really to make houses worth more. Once they see what has been done, they’ll know it is much like the split level down the street but effectively higher up. The other issue it may cause is water infiltration. Depending on how low you’ll be compared to the neighbour’s you may get water in the basement more readily because everything may be flowing downhill toward your foundation.

  • Ground level, or on grade can be explained in a very simple way. Your entry door is considered on grade. Anything above is considered above. Anything below is considered below. Pretty simple.

    • Alan F Macdonald says:

      Hi Craig,

      That is not quite true. If your entry door is above ground level, that level is not grade. The ground dictates where grade is. Some entry doors are below grade, and some are above grade. The term grade can also be found regarding grading certificates, where a builder must grade the earth around a home. The level of the dirt is ‘grade’.

  • Cory Wilson says:

    We are trying to sell our split level house. The appraisal came in but did not include the square footage of the house in the downstairs Each room including the bathroom and laundry room have full size windows that and you have to look down to see the ground. The foundation floor is concrete but the foundation walls are not. So how can this be considered below grade?

    • Alan F Macdonald says:

      Hi Cory, It doesn’t matter where your windows are. It is below grade if the floor is below the ground, even if it is a ‘high basement’. Foundation walls do not dictate what is considered below grade, either. Just the level of the floor makes the rule. If you were to step into the basement from ground level and you would step down, then it is below grade.

  • galen says:

    Alan,
    First, let me say your answers here have been very helpful. I have a slight variation which I am starting to think qualifies my downstairs floor to be at or above grade. Here is the situation:

    This house is built on a hill, with one wall dug in and outside retaining walls extending away from the house. The end result, to talk about the walls, is that one wall is certainly below grade, but all other 3 walls are at or above grade, with each having an exit door that is at or above grade. It would seem that the entire floor is thus at or above grade. Is that true?

    My interest does not actually effect definitions for marketing as there are no bedrooms on the lower level, but instead a den/living room, a dining area, the kitchen. Instead, the issue is installing flooring and having increased options if this counts as on or above grade for warranty etc. There seems to be no issue with moisture as despite this out being 50 years old, there is zero evidence (after a careful comprehensive home inspection) of any moisture seep at all which is not surprising as the earth here is very well drained course granite with no natural water flow to this lot due to the area topography…but all that is beyond your role of helping with the simple definition of at or below grade on a hill with retaining walls outside.

    thanks

    • Alan F Macdonald says:

      Hi Galen,

      Great question. In Edmonton specifically, if any of the floor-space is below grade, the entire area is below grade. This counts if just one wall is below grade as well. So in my particular jurisdiction, even a walk-out basement is considered below grade. But this is a definition for the real estate board. If you need a warranty definition, I’m afraid you’ve come to the wrong place. I see that you are located in Oregon, so you may have different rules for counting space where you are. Best to check the definition with the person supplying the warranty to be sure. When it comes to warranties, they’re not in the business of covering mis-use. But in this case, if you are confident that no water will affect the floor, why the concern? -Alan

  • Jeff says:

    Hi Alan – great site – interesting comments – its said split levels with rear walk-out with three external sides at grade, is considered above grade, even though the inner 4th wall is lower than the front the house – from this it seems the hillside 2-storey homes with main walkout at grade on three sides should count the main even if below grade a couple of feet on the front side

    • Alan F Macdonald says:

      Hi Jeff. If any part of the floor is below grade, the level is below grade. The line has to be drawn somewhere, otherwise there could be no convention. You could argue 1 wall, 2 walls, 3 walls could be below grade. You could excavate and change the designation. It may be different other areas, but there isn’t a more reasonable way to count below grade levels than the way it’s done where we are. The bottom line is the house is what it is. What it says on paper is not the be-all end-all. A buyer is going to visit the home before they purchase it. For the public’s sake, we need concrete definitions of these terms. Bending the rules isn’t helpful.

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