What Sellers Need To Know About Basements

Here’s what you need to know about basements in Pennsylvania.

Today I have a tale of two basements in otherwise comparable houses. One

is a finished basement with a den, bedroom, and full bathroom. The other

basement has some drywall, an exposed toilet, and a painted floor. The listing

for the first house reflects the basement and number of bedrooms, including

the one in the basement space, in its total square footage and price. The

second house only includes the square footage of the main floors and does

not count a 200-square-foot bedroom in the basement. Which listing correctly

shows the square footage for a basement? The short answer is both. 

In Pennsylvania, listing agents and appraisers must distinguish between

above-grade square feet and below-grade square feet. This basement

space, whether finished or unfinished, would not be included in the total “gross

living area.” One of the questions I am most often asked is why a basement or

level that is partially below grade is not counted in the gross living area. There

is a value given to below-grade space; it’s just included in the total. 

"If a home with a finished basement wows a buyer, it probably will obtain a higher price."

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. Therefore, a walk-out basement with finished rooms would not be

included in the above-grade room count. This would be given value as a

finished basement. The overall square footage will factor into the financing of

a house. Your appraiser must generally appraise the house for the sales

price or higher for the lender to provide the funds. They must follow the

rules of Fannie Mae. 

Unlike commercial real estate, homes are generally not priced strictly on

square footage. Whether a basement is included in square footage or not, a

nicely finished basement will add to the value of a home. While the price per

square foot for a swanky basement is not as high as main-level upgrades, an

appraiser or potential buyer will certainly appraise the home’s value as higher

with the additional living space of a basement. This is true whether the

basement is a walk-out or below ground.

If a home with a finished basement wows a buyer, it probably will obtain a

higher price! We will help you determine the value of your finished basement.

Just call (717) 695-3177 or email info@joydaniels.com. Our buyer and seller

specialists are on standby and ready to help you!

Wishing You a Happy Thanksgiving

We have so many things to be thankful for this Thanksgiving.

With all of the holiday noise and Black Friday messages flooding your inbox,

I wanted to take this opportunity to say Happy Thanksgiving! I am so grateful

for the fall weather, the beautiful trees, and the support of my family and

amazing husband.

All of us at Joy Daniels Real Estate Group want to thank you, our clients,

friends, and customers. We had an unusual but amazing 2022, and we

could not be more thankful for all the support and blessings given to us

in this market. We hope you have a wonderful Thanksgiving with your

friends and family.

We are here to serve your needs and help you realize your real estate goals.

If you have any questions for us, please call (717) 695-3177 or email

info@joydaniels.com. We look forward to hearing from you.