Selling Your Home: Should You Finish the Basement?

Your basement has a lot of potential.

That’s untapped square footage begging for a better purpose. It could become anything – a family room for movie-watching, a home office, a playroom, a guest suite, and on and on.

The only problem is, when selling your home, finishing your basement may or may not be a wise investment. Find out when to invest in your cellar and when to leave it alone.

Selling Your Home: When to Finish the Basement and When to Skip It for Resale

There are times when taking the plunge and committing to a finished basement is an easy decision. Other times, it’s not so simple.

Do It: Buyers in Your Market Expect It

If buyers in your market are expecting a finished basement, you should go for it. You need to be on par with your home’s comparable listings, if not better. If the market is full of homes with finished lower levels, then in order to compete, you may have to spring for the project.

Maybe: You Don’t Compare with Other Houses in Your Neighborhood

When considering whether updating the basement is a good investment, look close to home, not just in the wider market. If most comps have three bedrooms and you have only two, then finishing your basement can bring you up to speed. If the comps all have downstairs family rooms, then you might want to create the same space to compete.

On the other hand, if the norm is to have an unfinished basement, see how you compare in other areas. If you’re up to scratch, you may be able to leave your basement as-is.

Don’t Do It: The Market Isn’t Good for Sellers

It’s difficult to recoup any investment when the market is down. Refinishing a basement can get expensive, and you may not get back any of that money in the sale. What it can do in a down market: attract more potential buyers, or help sell your home faster.

Do It: You’re Really, Really Handy

If you can complete the work yourself at the same level of craftsmanship as the rest of your house, it may be worth the investment. However, you have to make sure you don’t make the update too personal. Finish off the bones of the space with drywall, paint, and flooring, and make sure the plumbing and electrical are up to code. This type of usable blank slate will appeal to most buyers.

The Resale Value of Finishing Your Basement Depends on Lots of Factors

Selling your home may be easier with a finished basement – or not. The smart thing to do is to look closely at your local market as well as the comps in your neighborhood. Consider the state of the market, too. Don’t forget to think about how handy you are and what buyers are expecting.