Housing Deed Question

[hockeygrl]

Okay, I think this is only peripherally money related, but I don't know where else to ask this question:

We recently had three rooms in our basement finished, which added about 500 square feet to our finished living space. We went from a 3BD/2BA house to a 5BD/1OF/2BA house (we're finishing in stages so that we can pay cash as we go. Next summer we'll finish the bathroom in the basement).

Anyway, we hired a contractor, got all the permits and did everything legally, so my question is how do we update the deed to reflect the new square footage. Or do we even have to? And how do you do the insurance now that the house is larger? Logically, the insurance would go up, but isn't the amount of insurance tied to the officially recorded deed with the county?

Any real estate gurus have any recommendations?

[swamp]

The deed is description of the land, not the house. You don't have to update the deed.

You call the insurance company and tell them.

[hockeygrl]

That sounds like I was overthinking a very simple process. I often get in the weeds like that! Thanks!!

[Peace77]

The insurance is not tied to the deed.

The insurance is on the property (house, garage and any other buildings). The insurance is whatever kind you specify, replacement cost or not.

If there is a mortgage on the property, insurance is required.

[hoops902]

Also, "finished living space" is not the same as your home's technical "square footage" when you're talking about basements. It could or couldn't be depending on the specifics of the basement.

I can tell you that with our home addition the extra square footage was added onto the county records automatically since we went through the building permit process. They did not record # of beds or baths, only square footage that had been built according to their rules.

[hoops902]

Also the insurance was a completely different issue. We had to call the insurance company who came out and took photos of the new additions. They insured the value long before we ever got the finished COO on the construction. I would imagine you call your insurance agent, tell them you've finished the basement, and they adjust your policy accordingly, probably after verifying you've done what you say you've done.

[alabamagal]

Also, when you have the permit completed, the county may do a reassment for taxes. So be prepared for higher taxes. We added on to our house, it took the county a while, but by the next tax assessment, they updated their records to show the new square footage and higher taxes

[phil5185]

To an appraiser, the distinction is whether you have a walk-out basement or a below-grade basement. Generally, when you 'finish' a basement an appraiser doesn't add to your livable area.

Think about it - if 'finishing' added square footage, everyone in the north half of the US would frame out a few walls, nail in some drywall, add lights, call it 'finished' - and immediately claim that their 2000 ft house is now a 4000 ft house.

[hoops902]

"Think about it - if 'finishing' added square footage, everyone in the north half of the US would frame out a few walls, nail in some drywall, add lights, call it 'finished' - and immediately claim that their 2000 ft house is now a 4000 ft house. "

Happens ALL the time. But you can't call it square footage unless you meet all of the requirements necessary to include space in the square footage calculation. At least here, that has nearly nothing to do with whether you have a walkout basement or not (other than the fact that walkouts often have sliding glass doors which counts toward the window/wall ratio of the room and as an egress point). Obviously this has nothing to do with the appraisal, but it's not uncommon for people without walkout basements to be able to legitimately include part/all of the basement as part of the home's official square footage.

[hoops902]

"To an appraiser, the distinction is whether you have a walk-out basement or a below-grade basement. Generally, when you 'finish' a basement an appraiser doesn't add to your livable area."

Think about this in the same way as your 2nd paragraph though. If this was the criteria for finished square footage everyone would just build a walkout basement and toss up some drywall and call their house double the size. There are a lot more requirements than just having a walkout basement before you can officially count the space as home square footage. Having a walkout on one side of the basement does nothing to make the rooms which are still below grade more liveable.