Basement

A basement is a level of a house that sits partly or entirely below the ground. Some are unfinished storage and mechanical space, and others are finished into bedrooms, family rooms, and bathrooms.

Under ANSI Z765, a basement is never part of gross living area. If any part of a level is below the ground on any side, the whole level is below grade, so a walkout basement with a full-height back wall is still a basement.

Finished basement space is not ignored. The appraiser measures it and reports it on its own line, separate from gross living area, and it can still add to the home's value. It just is not compared with the above-ground living space of other homes.

Further reading: Basement on Wikipedia.