Fully finished basement seldom raises market value

Q. We moved into our house some years ago. It is a 1,056-square-foot ranch house, with a partially finished half of the basement. The other half is just a washer, dryer, workbench, etc.

We are wondering if we finish the other half, what would be the financial return at sale time? We are not anticipating a sale anytime soon. But would it be moneywise to have the other side completed for occasional living space, mainly for small gatherings, such as Christmas?

A. A finished basement makes a house more attractive to buyers so that it's easier to sell, but it seldom raises market value very much. Increasing the size of yours probably wouldn't make any difference to potential buyers, but perhaps, as the other half is already finished, you might be able to do it inexpensively.

It's best to make improvements primarily for your own enjoyment. From a financial point of view, though, it's unwise to improve your property much beyond the top price buyers seem willing to pay to live in your neighborhood.

Q. When will appraisers start assigning premium value to “green or sustainable” homes? While the Appraisal Institute recognized decades ago that reduced operating costs allow borrowers to pay more in mortgage, I have yet to see appraisers apply this logic. Instead in my experience, “green/sustainable” still is greeted with skepticism like “berm or dome” homes in the past.

A. Extra value for green properties will show up in appraisals when buyers pay extra for it. Otherwise, adjusting for that wouldn't really reflect market value.

Q. My mom is 86 and owns a condo in Florida with no mortgage. She had the deed listed with my name on it, too. She is in fairly good health, but she's afraid her cash is running low. She is considering a reverse mortgage. Can you advise on how we can make that happen, since my name is listed on the deed?

A. For a reverse mortgage, all owners of the property must be aged 62 or older and live in the house. Sorry about that.

Q. Last year, I had my house up for sale. My agent wanted to install a lockbox to hold my door key for easy access for potential buyers seeing the house. I did not allow this, since their own contract states that the real estate company was not responsible for any theft due to someone breaking the lockbox and opening the house. In the past, all the lockboxes I saw were on vacant houses.

It is my observation that the agent did not want to spend any time showing my property. He always called me up to see if I could show the house myself. A lockbox would reduce his activity level, since he would not have to be there.

After my contract expired, he sent a note stating he did not want to re-list since I did not want a lockbox. I just am wondering about this. It seems that having a lockbox while still living in the house is like always having an open house and never having anything valuable in the house.

A. Yes, having a lockbox on your property is somewhat like always having an open house, making it easy for other agents in the Multiple Listing System to show your property to their potential buyers.

You are mistaken, though, in thinking that no agent would be present. Only someone licensed by the state can open the box to get at your door key. A record is automatically kept of who used it and when. And for a thief, there'd be lots of easier ways to break into a house than by smashing that box.

But if this made you nervous, you had every right to refuse, just as you could have refused to have a “for sale” sign on your property. For that matter, a seller could require that the listing agent be present every time the house was shown, even by another broker. Of course, all those limitations would lessen the chance of finding the best sale.

The agent who had you show the house on your own wasn't doing much of a job — you didn't have to keep him. You could have reported the situation to his supervising broker and asked to have someone else represent you.

Ÿ Edith Lank will respond to questions mailed to 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or e-mail her at ehlank@aol.com.

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