Buying A House With Unpermitted Basement
Buying a house with unpermitted work comes with significant risks for your homeowners insurance, mortgage lender and more, so it may not be the best fit for every family. However, home buyers who can legalize the unpermitted additions before closing can mitigate their risks and buy a home they love.
buying a house with unpermitted basement
Any alterations or construction done to a house without the proper permissions to make it lawful is unpermitted work. To have the correct paperwork, you need three separate permits and licenses, including zoning, plan review and post-construction inspections.
Sellers should disclose any unpermitted work done on the home. Hiring an experienced home inspector and a knowledgeable real estate agent can help you discover any additional issues in the home buying process that you may be unable to catch on your own.
As the buyer, you have the right to have the house inspected within a certain time frame, thanks to an inspection contingency. You then might negotiate repairs or terminate the agreement based on the home inspection results. This small step alone can save you time and thousands of dollars.
It is not common, but city inspectors come down on homeowners with unpermitted work from time to time. The difficulties could include being required to get the work permitted, including hiring an architect, making changes to meet codes, etc.
It does not happen very often, but it is possible that if the lender you used finds out that you knowingly bought a home with an unpermitted addition, it could demand the full repayment of the loan immediately.
If you buy a home and discover unpermitted work, you should ask the seller to make their property legal. Are you going to buy or sell a house in the Metrowest, Massachusetts area with unpermitted work?
About the author: The above Real Estate information on what to do about unpermitted work when buying or selling a home was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at email@example.com or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 37+ Years.
Jody Ellis is a freelance writer with more than 15 years of experience in the writing industry. Her work includes copywriting and content marketing for real estate professionals, stories covering real estate trends and housing markets, and varied articles on decor and design. In addition to buying and selling several homes herself, she's also owned and managed rental properties, and previously worked in mortgage lending.
Yes, you can sell a house with unpermitted work and are required to disclose to buyers any known unpermitted work done on your house, even if it was done by previous owners. Unpermitted work is anything you do to your house that would normally require a permit from your local city building department and where a permit was not obtained. Requirements vary by county and state, but can include improvements like adding a room, replacing windows, or building a garage.
The best way to find out if your house has unpermitted work is to physically go down to your city permit offices and look at their records. From there, you can check to see if your home matches the plans of the permits. If not, chances are something was done without approval.
Your agent may even suggest not including the unpermitted work in the calculation of market value for the home. For example, if you have a two-bedroom property, but the second bedroom was built without a permit, you might choose to value the property as one-bedroom.
Your lender might agree to grant you a mortgage even after discovering unpermitted work. However, they might not let you borrow enough to cover the purchase price. This depends largely on the outcome of the appraisal. In some cases, your appraiser might not value the house at what you need to borrow in order to match the list price.
Buying a house with unpermitted work can affect your home insurance and ability to seek repairs. It can also hinder the selling process, as selling a house with unpermitted work can be a red flag for buyers.
As a whole, buying a house with unpermitted work is not a great idea. First, you are putting yourself, your family, and your belongings at risk. If unpermitted electrical work causes a fire or an unpermitted porch breaks down, you could be seriously injured. Next, you must pay to get permitted repairs on whatever work was done, which means a seemingly well-cared-for home could have thousands of dollars in damage that needs to be addressed.
If you currently own a house that has unpermitted work, you have a few options. The path you take will depend on how much you are willing to spend, how quickly you want to sell your home, and if you will take a potential loss on the sale for selling a house with unpermitted work.
If you are worried about selling your house with unpermitted work, then consider how you market it to potential buyers. Leading with an unpermitted work disclosure is a good start, but there are other ways to get your home noticed:
Conversely, the best way to navigate the home buying process is with an experienced Realtor who knows to ask about unpermitted work. They can help you negotiate a good deal on a must-have property that needs repairs or sell your home that was completed with unpermitted repairs. You do not need to be a lawyer or real estate professional as long as you hire someone who is.
The most common projects to be done without permits are bathrooms, kitchens and decks, according to Steve Cunningham, chair of the Remodelers Council at the National Association of Home Builders (NAHB). Real estate agents in various markets added that other conversions, like basements or garages to increase living space, are also common trouble spots in this regard.
Have you recently tried to sell your house, but the inspection uncovered unpermitted work? When trying to sell a house with unpermitted work, there are several things you should focus on immediately to protect yourself from lawsuits and losing tens of thousands of dollars.
Selling a home without proper permitting can have major legal and financial repercussions. Not disclosing the unpermitted work to buyers can lead to you being sued down the road when they find out that there was unpermitted work done on the home while you owned it.
The issue with selling the house with unpermitted work (if someone is willing to buy it) is that you will most likely have to accept a lower offer. While you may not like hearing this, the buyer will have to invest their money into having the construction redone and pulling the permits for the work.
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Once in a while, you may run into more serious problems with unpermitted work. It can be a whole ADU or an addition to the house that was unpermitted. A whole habitable structure requires many different permits including building, electrical and sometimes plumbing permits. Not only this is a big project to retroactively permit the structure, the city may order the structure to be torn down. If the City finds out any unpermitted work on a property, fines can be very hefty. Such fines will create a lien on the property if unpaid.
So bathrooms are easy to tell. How about an addition to a house? Often times, an addition is difficult to even see. If you and your realtor believe that a portion of the house is an addition, then look up to see if the addition was permitted at some point. Portlandmaps.com will only list permits filed after year 2000 so anything prior to that needs to be verified directly with Bureau of Development Services.If you wonder what kind of work needs to be permitted, read this pamphlet made by the City of Portland to learn more about it.
My brother and I decided to buy an old home to renovate ourselves and make a profit when we eventually plan to move. We did not have much knowledge and did not do much research before going into this and now after reading online, I feel like we've gotten ourselves in a big mess. I realized that a lot of the changes we've made would most likely have required a permit. We've taken down a wall, moved the stove gas line, moved baseboards (water pipes), gutted and redid the shower in the bathroom, added/removed electrical wiring, pretty much everything essential. The kitchen is still unfinished as we have not had the time to start on it yet, but I do have a small amount saved that would only be able to cover material costs. Although I do not think a permit would be required to just put in new cabinets/appliances(?), could be wrong. But I do not want to go forward with this if I know that we will have trouble selling this house with all this unpermitted work. At this point I just want to walk away from the house but we've spent a lot of money and time. Is there anything we should do to make the house sellable to buyers? Or should we try to sell the house "as-is"?
I'd say it depends. Let's say you shifted a bedroom door within a ceiling joist bearing wall over 2 feet, and just moved the existing framing and the slab and ceiling framing still allowed for that, then no one might even know you did it. If you did plumbing and electrical, and it looks as if a professional did it, then no one might even know. Most locales allow the actual homeowner to perform their own work (albeit with inspections). Certainly code compliance is easy to ascertain, but if what you did looks unprofessional, or not as if it was originally done in the house (e.g. open concept in a 1950's house), then questions arise. 041b061a72