Will a finished basement add value and square footage?

Asked by Nicole, Saint Charles, MI Mon Jan 14, 2008

My house is 1179 sq feet. I have about 800 sq feet of basement we are finishing. It's a walkout basement with sliding patio doors and a full window. The Basement leads out to the back deck which is huge. In the basement we made a storage room and we put nice tile and carpet down all over. We are going to have a 13x22 family room with fireplace, an area for a pool table, a bathroom with sink,toilet and stand up shower, and then another open area. My concern is that the ceiling isn't as tall as it should be in some places. We had to cover up the furnace ducts. I am just curious if all this will bring up our homes value and if so how much. I'm looking at refinancing in the next year. The updates were going to be done no matter what to make use of the space but I was just curious. This is our first home so any information would be helpful.Thanks in advance!

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Kathy Toth T…, Agent, Ann Arbor, MI
Mon Jan 14, 2008
The answer below is correct, there is additional value but the 800 square feet in the basement is not added to the total square feet and is calculated at a lower price per square feet than above grade sq feet. To assess what you get for cost vs. value, look at the Midwest section of http://www.costvsvalue.com report, or use the pdf report here http://www.aaabor.com/downloads/News/e-Source/CostvsValue-De…
I hope you enjoy your first home; it sounds like a great use of your space.
2 votes
Jen, Other Pro, Saint Charles, MO
Sat Apr 27, 2013
These are all great answers
0 votes
Jim Welden, Agent, Greenwood Village, CO
Mon Jan 14, 2008
Nicole - I am sure your improvements will add value to your home assuming the permits have been pulled and the work is completed professionally - my observation after showing tons or homes and hearing Buyers comment is that a basement finish creates the most value to Buyers when it is completed at the same level of the rest of the home and uses similar finishes (trim molding, doors, etc).

If the finish is much better than the rest of the home, then I hear "I wish the rest of the home looked like the basement" and if the finish is not as good, then I hear "I will have to tear out the basement and redo it" - certainly both are generalizations and there are always exceptions.

If permits have not been pulled, then you may want to explore what can be done now - although there will be some Buyers who will care less as long as the work was completed professionally, there will be some Buyers who will eliminate your home as a possibility if the permits have not been pulled.

Basement finish in your situation will almost double the "finished square feet" in the home and if I was marketing the home, that is one of the factors I would emphasize even if the local MLS does not include basement square footage in the "square feet" field. An additional bath is always helpful so I would think that will help the value of the home.

My experience is that if you have pay a professional to do the work, a basement finish may not increase the value dollar for dollar, but it will help it sell much faster and as long as you are living in it, you will enjoy having the additional finished area and that provides value to you. If you do most of the work, and it looks like a professional did it, then in my area, the value would increase more than the cost of the materials.

The ceiling height issue is probably a function of your immediate neighborhood - if the homes around you also have low ceilings in the basement, then it is probably no issue - if the other homes have standard height ceilings and you have a lower ceiling, then Buyers in your neighborhood will notice it when they walk through your home.

I hope that helps and enjoy your new living space!
0 votes
smith3gary, Agent, White Lake, MI
Mon Jan 14, 2008
Nicole, Two good answers. This website contains some additional information http://www.michigan.gov/documents/Vol1-02GeneralInstructions… including examples. The cost vs value report Kathy referenced has information for Detroit and Grand Rapids areas. This would still be relevent to Saint Charles.

Keep in mind, the quality of the work and floor plan of your remodel will affect how future buyers view your home. If your remodel is not being done to code and without permits this could end up costing you when you sell.

Please make sure you are following local building codes for ceiling height. I believe they do have thinner duct work that can replace your current ducts and allow for more ceiling height.
Web Reference:  http://mi-living.com
0 votes
Missy Caulk, Agent, Saline, MI
Mon Jan 14, 2008
It will add to the value, but not by as much as the upper square feet. Most appraisers use between 20.00 to 40.00 a square foot. When I am doing a CMA, I use 30.00 per square foot for and average. You won't get back dollar for dollar what you put into it, but it does help to have if finished for re-sale.
Web Reference:  http://MissyCaulk.com
0 votes
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