Hello, July! We’re happy you’re here, but you certainly are hot.
If basking in the sun isn’t your thing, maybe lounging with a great movie in a cool basement is more your vibe.
At Knock, we come across tons of home sellers who see their basements as the perfect lounging space. From lighting to plumbing to entertainment units, we’ve seen it all. And when it comes time to sell, they’re expecting to see a decent return on investment.
How much do you think a finished basement is worth in a sale? The Knock team set out to discover just that.
In Metro Atlanta, basement upgrades don’t mean more $$$
We pulled FMLS data from four Metro Atlanta neighborhoods that have a substantial amount of houses with finished and unfinished basements. To make a fair conclusion, we compared houses with equal numbers of bedrooms and about the same square footage.
It turns out that, overall, houses with basement upgrades don’t really yield more money for sellers in the end. For example, in the four neighborhoods we analyzed, 4-bedroom homes with unfinished basements sold for a median of $345,000 in 2016. Meantime, 4-bedroom houses with finished basements sold for a median of $334,000.
It’s a similar trend with 5-bedroom homes. In 2016, 5-bedroom houses with unfinished basements sold for a median of $472,016. Their counterparts with finished basements sold for a median of $434,016.
What’s up with that?
First things first: Studies show that upgraded basements don’t actually yield as much as sellers think they do. On a national level, sellers make back about 75% of what they spend on basement upgrades, according to Remodeling Magazine.
And that’s if the project is executed correctly. Are the ceilings still too low? Is walking down the stairs a risky bet? Does natural light flow into the room at all? Are there any structural issues?
Looking at things objectively is key. A longtime homeowner might consider their basement space incredibly valuable because it has a floor, an HVAC system and the walls are insulated. But it’s important to be transparent. If a buyer can’t actually envision themselves enjoying the space, they’ll feel duped if a seller tries to present this basement as an “upgrade.”
There’s still some value, though …
If you’ve put time and finances into creating your ideal basement space, keep in mind that not all is lost. Your use and enjoyment of the area is certainly worth something. (By the way, here’s what Netflix is streaming this summer.)
And, there might still be an opportunity to win you back a few bucks. If you’re willing to make some minor upgrades, it might be worth it to help potential buyers see the space as more than a storage area. To learn how Knock handles repairs before listing, read up on our strategy.