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!
