This is thetale of two basem*nts in otherwise comparable houses. One is afinished basem*ntwith a den, bedroom, and full bath. The other basem*nthas some sheet rock, an exposed toilet, and a painted floor. The listing for the first house reflectsthe basem*nt in the total square footage, and in the price. The second house only includes the square footage of the main floors. So, which listing is correct? The short answer is both.
As a general rule of thumb, afinished basem*nt typically doesn't count toward theoverallsquare footage, especially if thebasem*nt is completelybelow grade—a term that means under ground level. What is included ultimately depends on which state you live in. Your local county assessor’s office determines ifbasem*nt square footage, finished or unfinished, canbe counted as part of what's known as the "gross living area."
Walk-out basem*nts
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For the states that doallow the addition of a basem*nt in the overall square footage of a home, theremust bean egress and ingress. This meansa door you canwalk out of to yard level on one side of the basem*nt, saysSharon Chambers-Gordon,a real estate agentwith Windermere Professional Partners in Gig Harbor, WA. Also known asa walk-out basem*nt, these square footage calculations are done based on how much of the basem*ntis above grade.
How basem*nt square footage affects your mortgage
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The overall square footage of a home factors intoan appraisal and, therefore, the financing of a house.The home has to appraise for the sales price, or higher, in order for the lender to provide the funds. Here's what mortgage giant Fannie Mae has to say on the basem*nt matter: "Only finished above-grade areas can be used in calculating and reporting of above-grade room count and square footage for the gross living area. Fannie Mae considers a level to be below grade if any portion of it is below grade, regardless of the quality of its finish or the window area of any room."
How basem*nt square footage affects yourhome value
Unlike commercial real estate, homes aregenerally not priced strictly on square footage. So whether a basem*ntcounts as square footage or not, anicely finished basem*nt generally adds to thevalue of a home, saysCarrie Abfall, a real estate agentwith RE/MAX Real Estate Professionals in Columbus, IN. While the price per square foot for aswanky basem*ntisn't typically as high as main-level upgrades, the home's value will certainly increase by adding in the additional living space. This is true whether the basem*nt is awalk-out or below grade.
If the home with the finished basem*nt wowsa buyer, it may fetch a higher price, says real estate agentRandy Elginwith Keller Williams Realty in San Antonio, TX.Elgin advises tooffer what you think is reasonable based on the home's gross living area plus some fairamount for the finished or unfinishedbasem*nt. Focus on the usable space and how much value you will gain from it.And include an appraisal contingency in the offer. That way you can back out if you are wrong about the market value.
The post Does a Basem*nt Count in the Square Footage of a Home? appeared first on Real Estate News & Insights | realtor.com®.
