You should,figure basement square footage at no more than about $25 per square foot, and that ON!Y if it is finished to the same spec as the other living area. Cheap paneling and clamshell molding in a basement where the house above is considerably nicer will not net you that same figure per square foot.

Also, your mother's house should be reasonably similar to the other homes of the same style and size and quality in her market area. If the other homes in her neighborhood/ subdivision/ town have been updated and hers has not, she will not net a comparable price regardless of how the basement is finished,.

The $40k to $50k estimate may or may not be accurate, but if you are willing to do the work for just the cost of the materials, it's certainly not a bad idea to get it back into useable condition. Your mom may be worried about the cost of outlay for materials (is she short of cash?) or she may worry that it will take a longer time to get out of her house, or that the work may be started and never really finished (good intentions interrupted by unforeseen life events).

If you really want to know how much the basement detracts from value, hire an appraiser to appraise the home's current value,. You can see what the downward adjustment will be for lack of a finished basement, based on recent comparable sales.

I would leave the basement as is provided she understands that the value is absolutely not the same as a finished basement. The bigger issue will be the aluminum wiring. If she wants to spend money on the house prior to a sale, THAT is the thing to tackle. I absolutely would not buy a house with aluminum wiring.

What if you put the basement back into 'basement' condition? Not half-gutted, but fully gutted, plumbing in place, ready to become a 'lower level'. Then it would add 'potential' rather than remind buyers that basements can and do flood -- and this one DID! I'd only pull out the before and after photos if pressed.

I don't know what $50K represents on the price of the house. I wonder how much you'd have to spend to bring the basement up to an acceptable 'lower level' standard, or if you'd recoup the expense.

Very few buyers want a 'work in progress'. If they do, they want it *cheap*.

In my area, bedrooms only count as such if they are above ground.

My mom had a similar problem. We completely gutted it as chisue suggests above. Removed everything studs, built ins, flooring, fixtures, the works. We painted the whole thing white and the concrete floor tan. Spotlessly clean...Spotlessly dry (for now) and people looking could imagine their own floorplans.

The aluminum wiring is the biggest issue for me also. No reason to start closing up walls if that needs to be addressed. I think making the gut of the basement complete might make the most sense. I would expect a hit for an unfinished basement vs a finished one, but I would expect a bigger hit for unfinished repairs. The unfinished repairs would be an instant no or lot of buyers -- more than totally unfinished, and they suggest problems encountered in finishing the work -- so more $$$.

Thank you all for your replies, they are appreciated. Here are some more information that I didn't think was relevant but now I see that it is. The house is in a neighborhood that was developed by the same contractor and has many similar houses to hers. Within a 500-meter radius, there are 7 houses of the same model, including hers. Her back door neighbor and the one diagonally across from her is the same model. There are other models, but all roughly the same size with the same features. The one diagonally across sold 2 years ago for $290,000. For what I know, the market is still roughly the same today.

When built, it was the last house on the street, but the street was extended into a new neighbourhood about 15 years ago, which also features similarly sized houses, some sold recently for $325-375k.

The basement was finished in 1978 with tongue-and-groove pine boards on some walls of the great room, 1/2" thick, aligned on a 45-degree angle to the vertical and the longest boards were custom made because my dad didn't want to have butt joints. These walls were not affected by the water damage. The ceiling and the remaining walls of the great room have stucco. The other rooms in the basement were finished with regular drywall to the same standards as the upper level, and have solid oak mouldings, but some were painted over. The doors are embossed, hollow core doors of the same quality as the upper level, but of a different model, painted the same colour as the upper level.

The builder used aluminum wiring, but all the basement was done using copper, so the only aluminum wiring in the basement is in the ceiling joists and feeds the upper level circuits only. I don't know if we were just plain extremely lucky or if Marrette 63 and 65 and CO/ALR devices really work, but there has NEVER been an issue with the aluminum wiring. No intermittent/flickering lights, no charred/burned wire nuts or receptacles, nothing. None of the aluminum is accessible without further demolition work.

The reconstruction work was never commenced because of several factors. We simply removed the portions that were damaged by water. She has two proposals by reputable contractors for reconstruction work, one 28k, the other one 32k. Both said since the aluminum wiring was trouble free, they would leave it in place. I figure if I do most of the work myself, I can probably do it for about 40% less?

In her mind, the house is more appealing as it is because there is less work to do to put it back in a fully finished condition, than a fully gutted basement, but I rather agree with you guys that it would be less appealing to most buyers, for the reasons you mentioned. She thinks she can ask roughly the same price as she would have had prior to the damages.

Sorry for the long post, please ask if you need to know more details. I appreciate your input so far.

I would rather spend the $ fixing the 1990 and older bathroom and kitchen and heat pump. Heat pumps don't usually last over 20 years and an inspector will point that out. Painted over 20 times cabinets are not what I would ever call good. You are used to it, but take a look at other listings and compare the kitchen and baths. I'm pretty sure your buyer would see those as a project as well, Easier to gut and clean/paint the basement (paneling isn't "in" anyway) and fix up the rest of the house. How old is the roof?

Probably should repair the laundry room and bathroom in the basement. Get a permit for the bathroom and that should ease buyers on the work being done right. Does anybody know if a permit would reveal the aluminum wire to the town's inspector and would they care?

Did homeowner insurance pay for any of the damage?

If I were looking at the house, I would definitely prefer a finished basement. Especially one that had been fixed up by the owner's son who was able to show me pictures and explain everything.

And I would love the fact that no excess money had been spent. For example, '... a master bath renovated in 1990 and still in good condition but starting to look dated and the kitchen is original to the house with formica cabinets that have been painted over about 20 times but are in very good condition.'

But I am a 'make do' sort of person and I'd be after something that I could afford, not wanting to spend more than I had to.

Good luck. I hope you all find the right buyer.

Please remove the too-identifying link. You don't want to make your mother a target.

Give me an clean unfinished basement (and attic) where a house's 'innards' are visible and easily accessed for replacement/repair. A family with young children can use an unfinished basement just fine as a place for the kids to let off steam. It provides storage. It insulates the house above it.

Some people (like me -- asthmatic) can't tolerate living below ground. A finished basement has no appeal for me, and a half-gutted basement is a negative for me and probably for everyone. A clean, dry, well lighted basement -- with a powder room -- does have value, and potential.

If you want to improve the house, do so above ground. Any Realtor can tell you what touches will pay off -- in more sales dollars or just in selling faster. If you're lucky, none of the identical homes will be on the market at the same time as this house -- or none will have the same be as 'move right in' appeal.

Trim those trees and shrubs so that people can SEE the HOUSE.

This is a nice, corner lot, with more valuable RE adjacent. A buyer could build an addition without over-improving.

You don't mention... who is likely to move into this house (or who is likely to buy it). Is it a starter home type of neighborhood, or a second home type of neighborhood? Young couples (maybe with young kids), or investors looking for income properties?

These also have a bearing on what to do. A young couple (with 1 small child) will not want aluminum wiring nor walls 3' off the basement floor that are open. Those a safety hazards. They will live with older kitchen/bathroom, if they have an idea that they'll be in a position to remodel those to their standards in the next couple of years, assuming they are all in good working order.

Some young couples will want everything to look "new" thanks to HGTV.

Investors, on the otherhand, know what a PITA aluminum wiring is for insurance purposes, and will tear it out (or at least disconnect it) and rewire the house with copper. So, they are looking for a cheap house that their electrician can go in and fix up. Demolition will be part of the process, so they aren't looking for a "new"/sparkling house. And, the basement won't be a deterrent, because, they'll be making a bigger mess before they are finished. In the end, they'd send in their drywallers, painters, and flooring specialists and redo the whole house so it is "sparkling" for their renters.

So, the other pertinent info that you haven't said it who is moving into these houses in this neighborhood?

ETA: There is no way she will get the same price for her house with an unlivable condition in the basement than she could have before the flood. She needs to get that out of her head. The house won't appraise.

She thinks most people won't mind the half-gutted basement, and
therefore she can ask almost the same price as if it was still
completely finished.

Sorry if this sounds harsh, but on what planet is a half gutted basement worth about the same as a fully finished one?

If it was me (avid DIY-er) I'd prefer the blank canvas. Others would want the finished one. $40-50K sounds rich for a basement, though. I'd press the realtors that are claiming that value to show comps of houses with and without finished basements to see the delta.

Pictures of what the half-gut looks like would help. I'm picturing walls that start at waist level and go up, but I'm not sure that's what we're talking about.

It's a basement. Nobody wants a half finished anything.

Did your mom get an insurance settlement? Will it pay to get it back to where it was?

So what is the selling price differential between an unfinished vs. finished basement?

I have a feeling it's not worth finishing, and you should gut it. Also, at a cheaper price the home may sell more quickly.

How old is the new neighborhood? Those homes will really hurt her with her old kitchen, baths, basement etc. Her house might well be viewed as a fixer upper and maybe she should do nothing. It will probably be bought by a flipper, but at quite a discount to the newer houses. To compete with them she will need to upgrade some things. Perhaps the young buyers who CAN'T possibly afford the newer home will like it with a cleaned out basement. No way will the basement add 40k. When her home is viewed the non-flipper will be thinking of the sparkling newer homes they saw and start adding up in their head what it will cost to make this house look like that. Those houses probably have high efficiency hvac etc and new windows too. Unfortunately, those new houses probably hurt her value rather than enhanced it.

As has been said, she needs to know her bottom line and her target buyer. The less she puts in , the less she gets out. My son has been house shopping, and I always am drawn to the clean basements over the old dreary damp looking ones. Finished is nice, but I know there could be trouble behind those walls....If she finishes it, be sure to leave access to inspect it.

I haven't heard anything here about the comps...do they have finished basements? Is the competition going to have finished basements, or is this unique to this home?

I ask because I sold a home in MD where we had put up studs but never finished the walkout basement other than drywalling in a storage area with lighting. The feedback from a lot of showings was that they were disappointed that it didn't have a finished basement which probably 1/2 the homes in the neighborhood were finished. The house was huge - as the former model home had all the add-ons - 4BR, 3.5 BA, formal living, formal dining, family, den/office, laundry room, kitchen with big nook - what on earth would anybody need with more finished space to furnish and clean!?!?! It was purchased by a couple with no kids. Geesh.