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A below-grade level completed with finished walls, flooring, and ceilings — usable living space rather than bare or unfinished area.
It often adds finished below-grade living area, though how that counts toward total square footage varies by listing and county records.
A finished lower level with grade-level exterior access (a door to the yard), versus a standard finished basement that sits fully below grade.
Finish quality and permitting vary by home — confirm permits and condition during your inspection.