Profile picture for roadflash

finishing basement reduces house value?

I am thinking about finishing my basement...adding a bathroom and a bedroom.  When I changed the information on Zillow, the value of my house went down.  Why is that?

  • August 21 2011 - Chantilly
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Answers (5)

Best Answer

Zillow does respond to posted changes in a home's appraised value. Smaller improvement jobs (construction projects valued below certain threshold values) may not be deemed substantial enough to rise to the level of triggering a home reappraisal. If not, there may be no change in your home's assessed value (great for you as far as it keeps your property tax basis down). In this case, there may be no appraisal information released for Zillow to note. When you sell your home, buyers WILL note the improvements, however, and your home's sale price will reflect those improvements. Zillow will "reset" its Zestimate after that sale, and the new sale price will reflect the true condition of the home. I hope that helps!
  • August 22 2011
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Zillow collects information from public records. Public records sometimes aren't updated very promptly (due to standard slower government processes). Thus, your home value may have been dropped on Zillow because of broader market changes, and the information on your addition (basement finishing) simply may not have been "published" for Zillow to see, yet. As a rule, more finished space means a higher sales price. (Note that appraisers may not count all of this space, if it is more than 50% below ground level. But that is not directly relevant to your home's market value/sales price.)
  • August 22 2011
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Profile picture for roadflash
I didin't increase the square footage but did pull the permits and enlarged the window.  Is zillow largely based on tax assessments?
  • August 21 2011
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Profile picture for SoCal Engr
When you added the new bedroom/bathroom, did it result in the sq/ft number being increased too? Or, was the basement already included in the sq/ft value?

If the latter, then I've seen Zillow reduce Zestimates based on projected size of rooms (i.e., more rooms, same sq/ft). Just something to look at.
  • August 21 2011
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Typically, finishing the basement should increase the value of your home - depending on the quality of work and the materials used.

Be sure to obtain the county permit and have all the required inspections done as you will be asked for the permit when you decide to sell your home. Also, in Northern Virginia bedrooms in basement to be considered  legal bedrooms must have a window large enough for the firefighter to pass through with equipment in case of the fire or other emergency. 



 
  • August 21 2011
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