By now, most people know what an upside down home owner is: someone who owes more on their mortgage(s) than their home is currently worth.
Supposedly, Americans are (still) collectively underwater to the tune of $5 trillion.
So, what’s an “upside down” house? (my term)
It’s a home where the finished square feet are disproportionately below grade (= basement) and/or the lion’s share of the home’s updates and amenities are located there (like the Master Bedroom).
Above vs. Below Finished Square Feet
Nothing wrong with that — the lower level is certainly quieter!
And with ramblers (“ranches” on the Coasts), that’s where almost half of the home’s potential finished space is (mechanical’s subtract a bit).
But, Realtors typically discount below grade square feet by as much as 75% (for what people think of as “scary basements”), or, in the case of lighter, nicely finished walkout basements, “only” 50%.
Meanwhile, Appraisers generally disregard below ground finished square feet altogether, because of their variability (height, finishes, walkout or not, etc.).
Instead, they focus on what’s called “above ground finished square feet.”
