Question about Finishing Basement

[chicmom]

We are planning on putting an offer on a 3 bedroom ranch with no finished basement...The realtor said that we should offer about $20,000-25,000 over the asking price for the builders to finish the basement before we move in. Just wondering what your thoughts are on that. It would be nice to not have the headache of getting it done after we move in, but I wonder if this is the best financial decision or if we should have it done after we move in. What are the pros and cons of this idea.Thanks!

[organicmommy]

Well our situation is a bit different as its not a new house, but we didn't offer extra to have ours finished off. My dad and dh do construction for a living and they don't charge anywhere near 20-25000 to finish a basement. If you know the sq ft you could call a couple of contractors and just ask them what an estimate would be to have it finished. Really if you have the space on the main floor, in about 6 weeks tops you can have the basement finished off after moving in. You can save yourself some money by doing the painting yourself as well.
We too need to finish ours off but we will be doing it ourself so that was not an issue we had to deal with.
Good luck in your decision!
Hugs
Jessica

[Rev1053]

No way.

You are already looking at making an offer on the house so the basement unfinished is a bonus... Right?
I would finish the basement after you have saved the money or can do the work yourself. I personally wouldnt want to add 25K to my mortgage if you could help it. Is the hassle of waiting a year or so really worth adding that much to your payment every month?
Besides my kids LOVE playing in the basement because its unfinished.

[hillymum]

I would do it, but not at that amount. Builders right now really want to get properties off their hands. Offer $10,000 to $15,000 over the asking price. I can tell you finishing a basement isn't as easy as some think, especially if DIY isn't easy for you. I say get it done then you can actually use the space.

[ChetMC]

I'd Consider It

I'm assuming that this is a new house and that the builder who built the house would be doing the work on the basement. I would seriously consider having the builder do your basement for $20,000 :

- if the builder does the basement, it will easily match the rest of the house (trim, fixtures, flooring, etc).
- if you're happy with the workmanship in the upstairs, you know what you'll be getting in the basement and won't have to worry about shopping around for a contractor you can trust.
- you won't have to live in a house that's under construction.
- it could be cheaper to have the builder do it now, this is something that you'd have to work the numbers on.

Friends of ours opted to not have their basement finished for $20k by their builder, but I've seen the basements their builder did and they are WAY nicer than what they got for $12K having it done later by some other guy.

Now, if you aren't in a rush for living space down there, and you're comfortable doing DIY, or now a great contractor it might not be worth it for you to get it done now.

[EFmom]

That sounds to me like the realtor is looking to pad her commission.

[luv-my-boys]

There seems like there can be a lot of variables here. Some pp have mentioned that 20,000 seems steep but depending on what they mean by finished it might not be i.e plumbing,flooring,electrical,drywall,painting. Is is DIY capable probably IF you know how. If you dont and would need a contractor I would suggest getting estimates from other contractors for similar work so a t least you get a baseline for what the work is *worth* also you might be able to cut a deal if you are buying from the builder to get it finished or semi finished for a reduced rate. I would think hard though because obviously adding it into your mortagage there is added cost vs. the inconvenicene of having it done later.

[Thystle]

Is this is a "hot" area where new homes are selling super fast?




Because if it is like most of the US and the builders are getting desperate to "unload" these houses they can't sell... I would ask for them to throw it in for free as a condition of you buying the house. Seriously. I do know a couple of people who have done that.


And it never hurts to try it that way!

[ChetMC]

For $20K

4

Originally Posted by luv-my-boys

There seems like there can be a lot of variables here. Some pp have mentioned that 20,000 seems steep but depending on what they mean by finished it might not be i.e plumbing,flooring,electrical,drywall,painting.

For $20,000 I would expect that to include plumbing and electrical, a full bath with fixtures, flooring, lighting, etc.

You're right that there's a lot of factors to consider.

[chicmom]

So they would be finishing 2 bedrooms, a full bath, family room, and possible kitchenette w/ counters, fridge, and dishwasher. It is about 1400 sq. feet.

This is a small town and there is only one realtor. DH and I are not handy. We have never even painted before, so DIY is not an option.

[tinuviel_k]

Originally Posted by chicmom

So they would be finishing 2 bedrooms, a full bath, family room, and possible kitchenette w/ counters, fridge, and dishwasher. It is about 1400 sq. feet.

This is a small town and there is only one realtor. DH and I are not handy. We have never even painted before, so DIY is not an option.

That sounds a little more reasonable then.

[Amys1st]

Originally Posted by chicmom

So they would be finishing 2 bedrooms, a full bath, family room, and possible kitchenette w/ counters, fridge, and dishwasher. It is about 1400 sq. feet.

This is a small town and there is only one realtor. DH and I are not handy. We have never even painted before, so DIY is not an option.

That would run in the high 5 figures where I live so I would do it. Close to the 6 figures if you get my drift.

[angie7]

Depends on what you plan to use the basement for. If you want it finished then yea I would but if you don't care, then I wouldn't worry about it. Personally, I would b/c it's always nice to have extra space. I read somewhere that the average cost to finish a basement is around $50k. Since this is a builder and not a private owner, you have a much higher chance of them doing this as they probably already figured that someone would request this but hoping that no one will.

[velochic]

I would do it after you buy. That's another $1500 or so for the realtor if you do it that way. I, too, think that it's the realtor wanting to pad his/her commission.

If you do it yourself, you can make sure that everything is done properly and to your standards/taste. I personally think this is an all-around bad idea.

[Emmeline II]

Pro- It would be part of your contract and it would have to been done properly before you would close. You would not have to search for a contractor and worry about them running off before the job is done.

Con- It would be part of your mortgage and you'll be paying the interest for 30yrs.

If you are not handy at all though, I would consider it. If you are handy, even with the cost of materials and tools, it would be much less. My dh finished our basement in our first house, though we had home depot come and do the carpet.

[BellyBean]

I don't think it sounds like a bad idea...just a couple thougths

1) Most people don't have 20K lying around to pay cash for a remodel, so a loan (mortage or not) would probably be needed. So I would just look at the difference in interest rates, and total cost over the life of the loan.

2) If you do have the cash, you could always apply it to the mortagage at any time...now or in the future to pay down the loan and remove that "portion of interest"

3) This would be a HUGE DIY project, especially if you don't have any remodeling experience. At the very most I would act as the general contractor and arrange all the work (which still takes time and effort!)

4) Not sure how long you are planning on staying, but you should also consider resale. The lower cost of DIY could pay out more money, but will the quality be done to the same level as the rest of the home?

[annekevdbroek]

I would most certainly NOT do this.

For one, any work on my house I want to control. There is an incentive by prepaying the owners for them to cut corners, and at the very least they won't be particularly concerned with the quality of the work.

Secondly, without a specific quote based on design plans and estimates from a builder, you really have no idea how much this project will cost.

You can ask for additional loan money from the bank and use it towards the model, or use a smaller down payment, or wait until you can afford to pay cash for the work.

I actually think this is a very unethical and unsound recommendation from the realtor. Are they representing the sellers also? If so, run, don't walk, away - and get your own personal realtor (even if they have to come from another town).

[SleeplessMommy]

[QUOTE=annekevdbroek;13893131]
I actually think this is a very unethical and unsound recommendation from the realtor. Are they representing the sellers also? If so, run, don't walk, away - and get your own personal realtor (even if they have to come from another town).[/QUOTE

I agree.

One more issue is a finished basement would hide any settling issues with the foundation - you would only find out when water leaks started. Waiting a year or so to finish would be prudent. And be sure to get a home inspection on any new construction home purchased.