When a basement isn’t rec room material

Q Will an unfinished basement with a structural issue affect the resale value of my property?

A “Depending on the size of the home, a functional finished basement can be very important because it provides added living space, storage and possible income (as a rental unit),” says Vito Vessio, a sales representative with Re/Max.

Trying to sell a home that has an unfinished basement with a structural issue can be a bit more complicated.

The impact on price will depend on the location of the home, the size of its lot and the type of space being sold (is it detached, semi-detached or a townhouse).

What a potential buyer wants to do with the home is also a factor.

“If the property is going to be completely renovated or torn down, the issue won’t matter, especially if the home is in a good neighbourhood.

“If this doesn’t apply or the home happens to be attached or a semi, then this will affect the price, especially for first-time buyers who may not have extra funds to deal with (a structural issue).”

Sellers in this position should always work with an agent to do a cost-benefit analysis of whether it makes sense to stay in their space or sell it.

“When renovation funds aren’t available and a seller has decided they need more finished living space, then they’re probably better off listing their property,” he says. “There’s no point throwing good money after bad.”

Disclosure when selling will be key.

“A prudent agent should hire a qualified home inspector to develop a full report for potential buyers.

“If the buyers aren’t happy with it, they can always hire their own inspector or structural engineer to satisfy themselves.”

If the sellers decide to stay in their space, because of location or for sentimental reasons, they should fix the issue as soon as possible (“it’s only going to get worse,” says Vessio) or set up a meeting with their bank to discuss financing the renovation.