Basement Square Footage

[kitten4]

What does it take for a "finished" basement to be included as livable square footage in an appraisal?

I have a large basement that has been separated into several rooms. I am assuming that if all the rooms have been insulated per code requirements and have heating/air flowing to them they are considered livable. Is that correct? Does it matter if some of the rooms are "sub-grade"?

Thank you very much for your help!

 

[Delta85]

In my area most finished basements are considered basements even if just a small portion of it is below grade.

There are exceptions though. Does the finished area of the basement match the above grade area in quality? Would buyers in your market consider the area in question a basement or part of the living area of the home?

 

[Papoua Jose]

Lending regulations do not allow finished/heated basements to be considered into the total heated above grade gross living area of a house.



A home with 1200 square feet, 2 beds and one bath on the main level and a full finished basement with additional rooms including a bedroom and bathroom isn’t a 2400 square foot house with 3 beds and 2 baths. It’s a 1200 square foot with 2 bed/1 bath with a full finished basement including a bathroom. The finished area in the basement contributes to value but typically not at the same rate as the above grade square feet.

This regulation prevents a 1200 square foot home with a finished basement from being compared with 2400 square foot home with no basement (in theory), I’m sure there are appraisers in the past who did such foolishness.

 

[kitten4]

Thank you! So it would increase the value of my property more if I would spend money updating my kitchen or bathrooms instead of the basement?

 

[RSW]

Appraiser's are required to follow ANSI standards in Tennessee. So, a basement is a basement. You would have a finished basement and that area would not be counted in the gross living area.

 

[CoorsLight]

Appraiser's are required to follow ANSI standards in Tennessee. So, a basement is a basement. You would have a finished basement and that area would not be counted in the gross living area.

RSW - do you believe that to hold true in the "cabin" areas of Sevier County as well? Especially given the defined market reaction to finished basements as square footage, and market prices reflecting such?

 

[sputnam]

Most residential appraisals utilize 'Gross Living Area'. Not 'livable area'. By definition, Gross Living Area can't be basement. If the appraiser is competent, it makes no difference. The dwelling is what it is. The above ground area will contribute to market value. The basement area will contribute to market value.

 

[Lost Cause]

Thank you! So it would increase the value of my property more if I would spend money updating my kitchen or bathrooms instead of the basement?

While it would be impossible to say for sure from afar, probably yes.

Just because below-grade space is not counted in GLA (gross living area) does not mean that your basement does not contribute value. However, it is very likely of lesser value than space that qualifies as "living area".

 

[RSW]

RSW - do you believe that to hold true in the "cabin" areas of Sevier County as well? Especially given the defined market reaction to finished basements as square footage, and market prices reflecting such?

Call the appraiser commission and ask them. I have done many appraisals of cabins in Sevier County and have never had a problem finding sales of cabins with finished basements. It is typical to see a bedroom or two in the finished basement and one or two bedrooms in the main living area while the septic tank is only approved for maybe one or two bedrooms. You need to take that into consideration, also. It may be that the same dollar amount per sq. ft. is necessary for the finished basement as that of the gross living area.