Home Buying in Richmond>Question Details

Julianna Wil…, Both Buyer and Seller in Richmond, VA

"Finished Basement" - how is it defined, and how much value does it add?

Asked by Julianna Wilson, Richmond, VA Tue Aug 21, 2012

Where can I find the requirements for a finished basement (heat/air/floor/walls/ceiling, or just some of those things?), and is "finished" space valued at the same amount as the rest of the home's $/SF? I realize this is a regional consideration, so I'm curious how it's handled in Richmond.

I'm looking at a home with a basement where the "finished" space accessed from upstairs includes:
- heat/air
- painted cinder and finished walls
- lighting
- painted joists with mostly-painted romex/plumbing/gas line/hvac visible (no finished ceiling)
- fireplace and wall-to-wall carpet in the living area
- a large walk-in, built-in closet
- a very basic full bath with a painted concrete floor, storage and laundry area
- a separate rear entrance

The rest of the basement is walled off from this space but accessible to it and includes a workshop (a little damp/moldy) with another separate rear entrance.

Thanks in advance!

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Your question is one that haunts Realtors all the time trying to evaluate where a list price should be or in advising a buyer interested in a basement home. The rule of thumb that appraisers have shared with me is that a moderately well finished basement with litte to no bad smells should sell per sq ft at about 50% of the above ground sq ft. So the average home in my county sells at about $120ish a sq ft, thus the additional basement sq footage would theoretically be worth about $60 per. Some basements may fetch greater value depending on number of windows, ceiling height, lighting, quality of finish, while of course some sell for less. What you have described i think would sell for less than the 50% mark. While your bank's appraiser has to ultimately say what the bank will lend, you as a purchaser are a key ingredient in determining the worth of the space as well.
2 votes Thank Flag Link Tue Aug 21, 2012
J, where is the home you're looking at? You've really piqued my interest. I'd almost tell you that I'd be glad to look at it. Even if you have another realtor, a second opinion might be something you need.
Flag Tue Aug 28, 2012
I can see this based on the differing opinions - thanks Paul! I replied to Don's answer with a little more info and a question about a sunroom as well...hoping to find an agreeable offer starting point for everyone (including the appraiser).
Flag Tue Aug 21, 2012
Yes, technically it sounds "finished." But it sounds as if it's a very low-quality job. My guess would be it was done by the homeowner. So if you're considering it, definitely get a home inspection. Make sure the electrical, plumbing, and other items were done properly and to code.

Even a nicely finished basement isn't worth nearly as much as above-grade space. Susan's probably right on her figure, but I'm guessing that the figure applies to nicely finished (i.e., a ceiling, paneling or drywall on the walls) basement.

I'd be more inclined to value it, at most, at the material/labor cost that went into it. Maybe $5,000-$7,000.

But your agent would be the best one to advise you on precisely what value (if any) that basement adds.

Hope that helps.
1 vote Thank Flag Link Tue Aug 21, 2012
It definitely does help Don, thanks. I'm looking back at the photos and many of the walls are finished (likely sheetrock), so this may fetch a bit more. I wonder if others who have answered my question will be notified of this new query: what about a nicely finished sunroom that is not heated or cooled? The city is including it in the finished SF...probably the same type of calculation (a percentage of the actual finished SF or material/labor costs), I imagine.
Flag Tue Aug 21, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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Julianna - This space you are describing would indeed be defined as "finished." The value does NOT carry the same consideration as above ground square footage price. Normally, it carries about 40% of the value. Hope this helps!
1 vote Thank Flag Link Tue Aug 21, 2012
This helps a lot Susan - thanks! I would like to come to an acceptable price for everyone in advance of any appraisal, and this calculation drives $/SF for comps.
Flag Tue Aug 21, 2012
My opinion is the same as Paul Gee. I too have been taught the general rule is 50% of the value of the rest of the home.

What you can't put a price on is the value of your enjoyment as a buyer. We personally built a home with a basement knowing the basement won't be worth as much as the rest of the house, however there is tremendous value to us on other levels...such as a space where we can have a media room, playroom for the kids, bedroom for guests, full bath, etc.

You said you are looking at a home with a basement...what does your real estate professional think?
0 votes Thank Flag Link Tue Aug 28, 2012
You are OVER-THINKING this:

The primary VALUE in a basement is possibly to the Buyer; if they want one.
It is a very difficult item for Appraisers to evaluate;
and there are no universal parameters.

Good luck and may God bless
0 votes Thank Flag Link Tue Aug 21, 2012
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