Definitely speak with 2-3 contractors, and if possible, use someone recommended by a friend. If you're unfamiliar with the area, or don't have any one who comes recommended I know a few people have had success with homeadvisor.com.... more
99% of the time, reducing the number of bedrooms lowers the value of a house. Your case may be an exception however. Your rooms sound very small, and this may turn buyers off if they can't fit a queen bed in them and still be able to walk around it. Having a really nice 2 bedroom home may be preferred to having an un-useable 3 bedroom.
I'm tempted to say move ahead with your idea, but make sure the results really say "wow"....get professional advice and use high-end materials.... more
As opposed to being unfinished or a house not having a basement, of course!....if you do an over-the -top remodel in the basement - or any other room for that matter - you may not recoup your costs. If you are going to spend money, FIRST do the kitchen appliances....... more