Finish Basement Before Selling?

9 years ago

Hubby and I are planning to put our house on the market in
2019 with plans to move out of state (we’re in VA). We are in a rural area and
our home was built in 2006. Our basement is not finished and we’ve contemplated
finishing it next year with hopes to bring up our home value, plus and it would
be something we’d enjoy having even if only for a short time.

Estimates to finish our basement are between $20-30K, which
would obviously take a bite out of our equity return when we sell. We plan to
use a personal loan to finance and use the equity return when we sell to pay it
off. We have plenty of equity in our home.

The thing we keep going back-and-forth on is if it’s worth
it to front the cost to finish the basement at this point. Since we are in a
rural area, it could take a while to sell, so even if we list in 2019 it could
take a year or more.

So, potentially we could end up being able to enjoy the
basement for longer, BUT is it worth it from a financial gain? I know basement
finishing ROI runs close to 70%, but that doesn’t mean we’d get more money for
our house since we are rural. Comps in this area are strange since most homes
around us are older/farm-type homes.

Featured Answer

gardengrlz
Original Author

9 years ago

After some extra research and a my gut feeling, I think we are NOT going to do it. From what I've found, if you ask 5 realtors their opinion, you're going to get 5 different answers. As it is, our house already has 4 bedrooms & 2 1/2 baths, so it doesn't need the extra living space, plus from what extra I've researched AND from speaking to the few realtors that sell in this area, many people don't want or even like how previous owner's have finished their basements. They'd rather have that blank canvas to do it themselves and the way they want it.

This actually might come to our advantage, as our neighbors who have the exact same house as us, have their house on the market now. Their basement is finished and the feedback they've gotten is that the house is just too big. They've not had any offers and they've had their house on the market 6 months...but I think they are listing it for too much $$ and are using a realtor who doesn't sell in this area.

I think that by not finishing the basement, we'll be able to list for a more sellable (?) or negotiable price and the house won't come across as too big. Plus, if finishing the basement does cost more to do and we don't get as close to our asking price, we could be out a bit of $$.

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Comments (11)

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Anglophilia
9 years ago
It really depends on your area and what people in it look for in a house. I discussed this with a very knowledgable realtor in my own area and she said no one cares a hoot about a finished basement anymore here. Children no longer play in a basement playroom - must be within eyesight of parents at all times. Men don't want their man cave down there - too far from the kitchen - only works if it's a full walk-out basement with its own kitchen. And the list goes on...

I'd save my money.
gardengrlz
Original Author
9 years ago
Ang, that's what I've thought too. Plus, the one realtor we spoke to last year said many people don't like the way a basement is finished by the previous owners, they want to do it themselves. But I don't know, I always prefer to have a finished basement than not when considering buying.

Most homes up here (near D.C.) have finished basements, and our home is definitely meant to have a family living in it. After finishing, our square footage would be over 4,000 (right now at 3,200).
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User
9 years ago
last modified: 9 years ago
Do you have your realtor chosen? As him or her. Or get a market analysis from 2 or 3 real Estate professionals. Pose the question to them.
Denita
9 years ago
last modified: 9 years ago
^^^jn3344 is right. The Realtor can run the recent sold comps with and without basement finishes to see if there is a difference in sales price. If there are few (or no) comps without a finished basement...there's your answer. The market could be different in 2019, but find out what your market is now and extrapolate from there.
gardengrlz
Original Author
9 years ago
The only issue w/comps is they are really strange for my area - I live in a rural, mostly farming area. Most homes withing 10 miles around us are older, farm or country homes and our house was built in 2006. The builder only built our house and the one next to us. Homes like ours are a rarity out here.

It really interferes w/getting a reliable comps in general, they are all over the place. The comps that do come available may have similarities in sq. footage, basement finish, etc., but they are usually older homes/farms.
freeoscar
9 years ago
Good advice. I'd lean towards not doing it because (as you can see on so many Houzz threads), people tend to underestimate the cost of renovations. So if they want a finished basement, maybe they ding you $15-20k since they'll have to do it themselves, but of course that'll cost them $30k.

My experience is much different than Anglophile. We have a young family, and we and all of our contemporaries love having a finished basement and our kids play there all the time. I'm not a man-cave sort of guy so I can't speak to that, but for play areas they are in high demand.
Denita
9 years ago
gardengriz, you might consider hiring an appraiser then to see if the finished basement is worthwhile. They can give you an appraisal value AS IS and the projected value with the basement. You would have to pay a decent appraiser and it would be as of the effective date and not a future date. Also, please know that the appraisal would be for you, not the lender that might finance the basement finish, if any. The cost of an appraisal is small relative to finishing the basement and then finding out it brings no additional value.

But, if I were in your shoes, I would speak to several Realtors that work the area to see what they say the market is for homes in your area with finished basements and without. Have these conversations with several agents and do it before you hire an appraiser. The Realtors may be able to give you enough insight to make your decision without having to go that extra step of hiring an appraiser.
freeoscar
9 years ago
seems like a good strategy - best of luck when you are ready to sell.
cpartist
9 years ago
I think you're making the right decision.
User
9 years ago
I'm not an expert in anything, just a family in the market. I'd never buy a home with an unfinished basement. Basements creep me out as it is, I don't like them. An unfinished one is much worse. When I buy, it's not like I'm going to have 30k in cash to make renovations. That just means I'd have to live with it.

I might not be typical, though.