What makes a "basement" a "room"?

It’s a safety thing.

Some (probably most) building codes require sleeping rooms must have direct egress to the outside.The little 1’x2’ basement windows like these aren’t considered large enough to let a person get out in case of fire or other emergency. As Hilarity N. Suze pointed out, you can add an egress to make the basement accessible to the outside. My brother-in-law did that – basically digging a large hole, knocking out part of the foundation, putting in a larger window and an escape ladder. The result was something like this.

It’s a lot cheaper than building an addition to your home to add a room, but a lot more expensive than the 0.1% Ultra Vires suggests.

Has anybody, with a reason to care, ever seen the existing unfinished basement? There probably isn’t anyone in the entire word that can tell you where your light switches and outlets are and what work was done by who and when it was done.

In Michigan basements cannot be advertised as floor space, thus not a room. Bedrooms must have a closet to be considered a bedroom on any floor. I have a finished walkout basement with a bed, bathroom, laundry room, utility room, closet and a wet bar, still not considered rooms by Michigan law. Still I have seen several of my neighbors advertise through their realtor that they have have finished basement with a bed and bathroom and count those as a room. There is no entity going around to stop them, but when it comes to sign the mortgage those are not not included in the official room count. I don’t have a problem with this since it lets potential buyers know that they have more livable space than what the legally defined floor space, room count or bath count actually is rated. All of my neighbors have finished walk out basements and those with kids always put them down there, so in reality it is living space that they don’t have to pay additional taxes on.

No, but the buyer gets a windfall. He or she gets a house which has an extra bedroom (defined as a room where people sleep) but pays a price as if the bedroom never existed.

The laws don’t create value. What people value in a home defines value. People value a nice basement as an extra bedroom even if it doesn’t have an egress to the outside. That has value; not as much as a building-inspecter-approved bedroom, but it has a real tangible value that people will pay for.

Let’s say that a 3/2 in your neighborhood goes for $150k and a 4/2 goes for $200k. It doesn’t make sense to pretend that this room doesn’t exist. Maybe it should go for $170k or $180k depending on how it is finished. But the appraiser will say, nope, $150k. There is no reason to simply ignore what is obvious to everyone as additional space.

OP: We’re all in different situations. I’ve mostly lived where basements are impossible because sedimentary mud. Check with a local contractor and your jurisdiction’s permit agency. They’ll tell you what’s what, where you are.

Pretty much all jurisdictions dictate what can be considered “sleeping rooms.” They have stricter egress and smoke alarm requirements in building codes compared to say a dining room or unfinished basement. Two means of egress are required, one of which is the door to the rest of the house, and the other is a window of certain size to the exterior with sill height maximums, operational characteristics, and clearances to window wells when in a basement. Smoke alarms are also required inside and immediately outside said rooms. Say you put a kid in a basement room without the required egress and smoke alarms and he gets injured, or worse, killed in a fire. Your homeowner’s insurance company is going to rake you over the coals and you could also very well go to jail for endangerment. Similar if you rented out that room to someone and something similar happened.

I’d actually say the opposite about framing out and insulating the foundation walls. Current building codes require the walls of unfinished basements and crawl spaces to be insulated, assuming the basement isn’t thermally isolated from the rest of the house (that would be insulation in the basement ceiling, but that seems unlikely if you have your furnace, water lines, laundry, etc. in the basement). Granted that’s usually done with insulation blankets rather than framed stud walls and batts, but you can do either.

You say the basement isn’t “tied into the HVAC system” but what do you mean by that? If there’s a furnace and duct work down there, then there should be at least a couple of registers. Punching some in shouldn’t constitute a finished space. It’s also not like you can’t have more lights and stuff. Of course as usual this isn’t any sort of legal opinion, but I think once you start sheetrocking is when it becomes finished. Yeah you can put some sheetrock on the walls but not the ceiling, or vice versa, and leave the floor concrete, then you’re in a bit of a gray area. But for the most part, if there’s no drywall then I doubt it could ever be considered finished space.

Point of reference with regard to an egress window… We did this 2 years ago. Egress was best defined to me as not the space for someone to get out but rather a firefighter with an air tank to get in and pull out any passed out people.

We did all of the dirt work so no cost there- dug down 5’ beside our solid concrete foundation. There was an existing 1’x2’ window but we just cut around it entirely.
$300 for the concrete saw guys to come and do their work (warning: this is the dirtiest and hardest to clean mess that I have ever encountered. Water and concrete dust being show into the basement left a wet mess that took hours of shop vaccing and scrubbing to clean so if possible prepare and plastic tent the back side!)
$350 for a legal egress window
$210 at Lowes for a 4’ deep corrugated sheet metal 4’x4’x4’ “U” to form the window well. It was custom fabricated and delivered in 10 days to my local Lowes.
$100 for bags of rocks for window well
$20 for lumber to frame the window well
and then just trim.

The only unusual tool is a hammer drill to secure the sheet metal to the foundation and the lumber to frame the inside of the concrete for the window jamb.

We purchased a “seconds” or rejected carpet piece and bargained it such that we got a nicer underlayment pad if we got free installation.

The room already had a closet but we went from a 3 legal bedroom (4 real estate advertised) to a 4 legal (and 5 advertised). But building a closet is trivial even for a DIYer.

Here’s a rural perspective, living where town water and town sewer connections are not a thing. Suppose I finished my basement before I put the house on the market. I wouldn’t want the realtor to say that this now finished basement is a bedroom because the septic tank is only permitted for a three bedroom home, not four. The buyers could use the space as they like - even now it has a walk out door and two full size windows so as soon as a closet is added it’d meet the legal definition of a bedroom - but I certainly don’t want trouble over having more bedrooms than the septic is rated for.

So what? Presumably so did the person who is selling.

And that is assuming the assessment is the only thing deciding the price.