(On LilburnDwellings.com, I have just started a series about the top ten misconceptions buyers and sellers have about home values. This is part of that series.)
On GwinnettGarageGuy.com I recently wrote a post about price and value. My friend Cindy Jones made a comment about a home with a converted basement that reminded me about this particular misconception… (BTW, Cindy is a great agent, and while we may slightly disagree about this particular issue, I would not hesitate in the least to send her a referral.)
Her comment was indirectly about a home with a finished basement being worth more than a similar home with an unfinished basement. And while there is a little bit of truth to that… the value increase is not nearly what most sellers think.
Many sellers feel that the basement that they have finished to be perfect for them is going to be perfect for each prospective buyer. But… it isn’t. Granted, it will be a positive for some prospective buyers… but far from all. As an agent that works with buyers, I often see them walk into a finished basement and it kills the rest of the house. Perhaps it is set up with a media room and work-out room, and what they really need is an inlaw suite. Maybe the basement is finished with several bedrooms and they really need a craft room… or a workshop… ora big family room… or maybe a pub. Get the picture? There are scores of possibilities.
Actually, on some projects I was involved in with investors, we “unfinished” basements. They were finished, but needed a lot of work. Instead of refinishing them, we stripped them and made them unfinished basements again. (NOT recommending that if you have a well finished basement… but these were rough). Much of the value in an unfinished basement is that it is potential. Buyers see their dreams in that empty space.
Flip side…
There is always a flip side. The finished basement CAN add value. But, generally it doesn’t add nearly the cost. And it will only really add value to a buyer that has a similar vision… especially one that doesn’t want to do the work himself. Finding that buyer can be tough… and given current market conditions, that buyer might have a LOT more options.
Bottom line…
As a seller, don’t get caught up in the assumption that the value added to your finished basement is going to be the same in the eyes of a buyer. It can certainly help to speed the sale, and be a great negotiation point. It may also add some value, but not as much as the finish cost, and not for every, or even possibly most, buyer(s).
In order to maximize the value added, marketing the property properly can be the solution. Lots of pictures, a solid and attractive virtual tour, video and well written copy are keys. The idea is to get a prospective buyer to share the vision.