Ypsilanti, MI · Member since 2015 · 84 posts · 9 votes
Hi,
I recently had my basement remodeled and added about 890 sqft of living space. The main intent was to make a 1bd apt for my retired parents to have a nice inexpensive place to live. Anyway, I now have a bigger house and want to refi and am curious how the process goes for adding square footage. Do I want to contact the city to have it changed? Or would an appraisal accomplish this? Also, I need recommendations on an appraiser in or near Ypsilanti, MI.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y
@Adam Spencer Is it permitted? I think you can get some funky city-by-city regulations around minimum ceiling heights, egress requirements, having windows on all 4 sides, etc. I'm guessing you'll have to talk to someone in the city where the home is located.
Contractor · Long Beach, CA · Member since 2017 · 17 posts · 9 votes
9y
It may depend on how the permits were pulled. If the permit and building plans stated the new square footage this record will likely go to the county assessor. Assessor would update specifics to the property. The property taxes would be reevaluated by the assessor once they process the city paperwork and more than likely reevaluated again after the appraisal and refi. You may want to contact the assessor to see how this is dealt with.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
9y
Basement square footage, even finished, adds minimal value. When you refi the lender will do an appraisal. Doesn't have anything to do with the tax assessor. Usually if you pull permits (hopefully you did this, basements often have specific requirements for finishing) the tax assessor gets the permit info and updates their records. That will change the space from unfinished basement to finished basement. But, again, don't expect a big bump in value. Its useful space, just doesn't have much effect on value.
Why? Because basements have a way of turning into indoor swimming pools.
Ypsilanti, MI · Member since 2015 · 84 posts · 9 votes
9y
I guess I should explain what was done a little better. The home already had 2 bedrooms and a bath in the basement but was in really bad shape. I decided to turn the one room into a storage and the other into a legal bedroom. I pulled a permit for the egress we installed but not the rest of the rehab. It sounds like I need to call the assessor and find out if they have done any paperwork.
Contractor · Grass Valley, CA · Member since 2017 · 35 posts · 26 votes
9y
Hello Adam,
The process to go through is you will need to draw up an "as built" plan showing the un-permitted square footage that was added. The plan will need to be to code and the work will need to be to code. If all the work was done right and to code it is not that big of a deal. If it was not, then it will be a huge deal. Once the plan is done showing all of the work, it can be submitted to your city/county and they will issue a permit and an inspector will come out to essentially final it. They will most likely require that they will be able to inspect your wiring make ups inside the boxes, wire size, circuit size (to confirm you have not overloaded a breaker), HVAC as it will need to have heat and air to it to count as SF. We just completed a project that had un-permited SF added to it and had to go through this process. That being said we are in California, land of the over regulated, so it might be even easier in your neck of the woods. Hope that helps.
Ypsilanti, MI · Member since 2015 · 84 posts · 9 votes
9y
@Sean Walsh Thanks for the write up on how this will work. I will prob read that though a few times for reference. Everything was done up to code just didn't pull permits so shouldn't be too big of a deal.
Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
9y
Why do you care about the square footage that the city reports? The mortgage (refi) will be based on the comparable value of the house. If based on other houses in the area, a finished basement suite adds an additional $30K (example) to the house's value, you'll be likely able to get a mortgage for that much more.
Don't get me wrong, there are benefits for getting the work permitted and inspected, and being on the up-and-up with your city/town, but it shouldn't affect a reappraisal by your mortgage company.
Ypsilanti, MI · Member since 2015 · 84 posts · 9 votes
9y
@Mike McCarthy That is a good point as well. I guess I was thinking that the appraiser wouldn't consider the sqft in the basement unless it was in the MLS. You are probably right though at this point I really just care about getting a decent refi for the added value of the basement apartment.