Selling With Unpermitted Work? Tips to Help With the Sale of Your Home

Permitted work is work that has been performed to code, with inspections from local officials to ensure that the construction is safe. Unpermitted work is work that has not been certified by local inspectors. Safety and quality cannot be guaranteed in unpermitted work.

As a result, many home buyers shy away from unpermitted work. Even for buyers who are willing to take the personal risk that construction might not be safe, unpermitted work can still make finding a loan a challenge. Therefore, unpermitted work can present a challenge for home sellers. Knowing what to do about unpermitted construction can help you sell your property.

Do You Have to Disclose Unpermitted Work?

If you are aware of unpermitted work done to your home, then you must disclose this information properly. In many states, failure to disclose information at the time of sale may expose the seller to claims of fraud by the buyer. Typically, real estate agents may not assist sellers in filling out disclosure forms for liability reasons. For questions about proper disclosure which aren't addressed on the disclosure form, it is recommended the seller consult with an experienced attorney.

What To Do When You Find Unpermitted Work

Home sellers who own a home with unpermitted construction typically have three options: get the construction permitted retroactively, remove the construction altogether or sell the home as-is. The best option will depend on the type of construction performed and also the home seller's budget.

Remove Unpermitted Work From Your Home

Sometimes removing an unpermitted change is easiest. For example, a garage that has been converted into an extra bedroom may consist of a wall in front of the garage door and carpeting over concrete. For a home seller hoping to get top dollar for their property, removing the unpermitted work may be the cheapest and easiest way to sell the home for full price.

Seeking a Retroactive Permit For Unpermitted Improvements

Some areas will let homeowners seek a retroactive permit. The process for getting a retroactive permit can vary from one area to the next, so if a homeowner chooses to obtain a building permit after work is done, it's essential to research your state to find out if obtaining a retroactive building permit is an option for you. Depending on what was done to the home, this may involve working with a qualified contractor to open up the walls or roof to reveal the construction underneath. Once this is done, an inspector will look at the work. If the work was performed to code, then the walls can be replaced when the inspector has approved the construction. If the work was not performed to code, it will need to be fixed in order to be approved.

While retroactive permits can be expensive to obtain, and the work can be expensive as well, some homeowners find this to be worthwhile in the end because it enables the homeowner to sell the high-end home for its full value. Deciding whether or not to pull permits after the work is done can be difficult, so homeowners with unpermitted work in their homes should work with a real estate agent to discuss the particulars of their home's unpermitted work. A real estate agent can help you weigh the pros and cons of obtaining a permit after work was done.

Selling As-Is Without Remediating Unpermitted Improvements

Selling a house with unpermitted work as-is might be the easiest option. However, a home with unpermitted work that is sold as is will likely need to be deeply discounted in order to find a buyer. To find out how much your home is worth with unpermitted construction, contact your real estate agent.

What Happens If Homeowners Don't Obtain a Permit?

Because of how difficult it can be for homeowners to remove or retroactively pull permits for unpermitted work, it can be tempting to just leave the work as-is and not make repairs. However, if a home has unpermitted work, the homeowner can face steep penalties if they're caught. What happens if a homeowner is caught without a building permit? If the project is still under construction, homeowners may be required to stop construction until a permit is obtained, which could take weeks or months. After the fact, if unpermitted work is discovered on a property, homeowners may be penalized with steep fines and required to either remove the construction or pay to bring it up to code. Both options can set homeowners back hundreds or even thousands of dollars.

Work With Your Real Estate Agent

Selling a home with unpermitted work can be a challenge. Working with a capable Palos Verdes Estates real estate agent is important. If you're thinking about selling a home that has unpermitted construction, contact a real estate agent as soon as possible.