real estate question - buy a house that has been remodeled w/o permits (1 Viewer)

[moleculo]

so we are looking at properties right now, and came upon a beautiful house in a great neighborhood with a finished basement (which is not common in Charlotte). I looked at the tax records for the house, and the tax man says the basement is unfinished. This leads me to believe permits were not pulled on finishing the basement. Per our realtor, the basement was finished prior to current owners buying the house, so they have no idea if permits were pulled or not.


Either this is a mistake on the part of the county, or permits were never pulled while finishing the basement...right?

How big of a deal is this? Should I be concerned?

 

[Hawks64]

House inspector says it looks good I wouldn't worry

 

[NutterButter]

Can you sell a house that doesn't have permits pulled for a variety of work? I ask b/c that's my house and I'd like to sell some day.

 

[MAC_32]

I'm surprised your realtor is so nonchalant about it. However, rules and regulations vary location to location so in Charlotte this may not be an issue.

If it is then It could be an expensive problem. If you love the house and would be willing to pay more for it, probably worth the risk of being back doored later. If the price doesn't jump off the page at you I'd say give me the permits or we walk.

 

[Dragons]

When we bought our current house, we asked for COs on apparent modifications. So, from that standpoint, you could have trouble selling the house if a future buyer demands a CO. From what we were told at the time, some modifications could trigger alarm during the appraisal (such as an extra kitchen in the basement or an extra half bath), making complications for loan approval.

 

[NutterButter]

When we bought our current house, we asked for COs on apparent modifications. So, from that standpoint, you could have trouble selling the house if a future buyer demands a CO. From what we were told at the time, some modifications could trigger alarm during the appraisal (such as an extra kitchen in the basement or an extra half bath), making complications for loan approval.

More concerned about the town dropping the hammer. Do they do any type of inspection when selling?

 

[jon_mx]

It makes a big difference on where it is. I would imagine most places would never catch and I it would never be a big deal. I would imagine there are extreme places like New York where it probably would make your life hell.

 

[NutterButter]

It makes a big difference on where it is. I would imagine most places would never catch and I it would never be a big deal. I would imagine there are extreme places like New York where it probably would make your life hell.

NJ. Could be hell?

 

[Dragons]

When we bought our current house, we asked for COs on apparent modifications. So, from that standpoint, you could have trouble selling the house if a future buyer demands a CO. From what we were told at the time, some modifications could trigger alarm during the appraisal (such as an extra kitchen in the basement or an extra half bath), making complications for loan approval.

More concerned about the town dropping the hammer. Do they do any type of inspection when selling?

This will definitely be regional, but I don't think our fairly uptight town did an inspection. Not as uptight as Otis' Pod-permit town, but ours requires a permit to build a shed.

Are you worried about the town killing your current deal, or killing it later when you try to sell?

 

[NutterButter]

When we bought our current house, we asked for COs on apparent modifications. So, from that standpoint, you could have trouble selling the house if a future buyer demands a CO. From what we were told at the time, some modifications could trigger alarm during the appraisal (such as an extra kitchen in the basement or an extra half bath), making complications for loan approval.

More concerned about the town dropping the hammer. Do they do any type of inspection when selling?

This will definitely be regional, but I don't think our fairly uptight town did an inspection. Not as uptight as Otis' Pod-permit town, but ours requires a permit to build a shed.

Are you worried about the town killing your current deal, or killing it later when you try to sell?

Later on. I'm a ways from selling, but its always been in the back of mind. Most of the stuff I've done is just remodeling with some minor electrical work or plumbing, but I have added a little addition for a pantry on the side where a porch used to be which is my biggest concern.

 

[MAC_32]

When we bought our current house, we asked for COs on apparent modifications. So, from that standpoint, you could have trouble selling the house if a future buyer demands a CO. From what we were told at the time, some modifications could trigger alarm during the appraisal (such as an extra kitchen in the basement or an extra half bath), making complications for loan approval.

More concerned about the town dropping the hammer. Do they do any type of inspection when selling?

appraisal from the bank is usually the bigger hurdle.

 

[jon_mx]

It makes a big difference on where it is. I would imagine most places would never catch and I it would never be a big deal. I would imagine there are extreme places like New York where it probably would make your life hell.

NJ. Could be hell?

I would be concerned in NJ. The worst two cases would be having to remove the improvements or being denied an insurance claim. The best thing to do is to call the county building department and see how they handle it. They may just require a fee to inspect it and require you to fix any problems they find.

 

[moleculo]

When we bought our current house, we asked for COs on apparent modifications. So, from that standpoint, you could have trouble selling the house if a future buyer demands a CO. From what we were told at the time, some modifications could trigger alarm during the appraisal (such as an extra kitchen in the basement or an extra half bath), making complications for loan approval.

the house I'm looking at has an extra kitchen in the basement. The current owners added a full bath and the kitchen appliances.

in terms of $/sf, this house is quite a bit more pricy than other houses on the street, that presumably don't have a basement. The asking price only makes sense if you consider the basement as usable space. Including basement sf, the asking price for this house is $110/sq ft. Excluding the basement, it's $139/sf. By ways of comparison, 2 houses down sold in April of 2013 for $112/sf, no basement.

I'm concerned about two things:

(1) appraisal - use basement sf or not?

(2) unpermitted = uninspected = potentially unsafe.

 

[Koya]

Again, check the local laws. It could be an unmitigated disasters.

 

[Gopher State]

I know a guy who remodeled his basement without permits, the city made him gut it and start over, STAY AWAY this is a bad situation

 

[MAC_32]

Again, check the local laws. It could be an unmitigated disasters.

 

[mr roboto]

A kitchen in a basement may not be allowed by code. If it was just drywall, carpet and ceiling I wouldn't worry. But uninspected plumbing in a basement concerns me.

 

[gianmarco]

You should be able to see if permits are on file for the work that was done with city hall. If not, then that would be a huge red flag.

 

[Johnny Rock]

When I built my house we had an electrical inspection and that's it. That's all that was required.

I would check further.

 

[mr roboto]

When I built my house we had an electrical inspection and that's it. That's all that was required.

I would check further.

To literally build a house.

 

[Patriotsfatboy1]

A finished basement with a full kitchen and separate rooms could be considered an in-law apartment, which may or may not be allowed there.

You also have to deal with the potential safety issue of uninspected utility work. That may be mitigated by the amount of time that has lapsed since it was put in, but it would be a risk that you would have to feel very comfortable with.

Could you put a contingency on the purchase that the town/city/county inspectors have to sign off on any remodels that were done?

 

[Parrothead]

I've known of instances where someone remodeled a bathroom without plumbing permits, and when the locals found out, they made the owner tear it up for inspections.. nightmare

 

[jon_mx]

I would make it a contingency as part of the sales agreement that all improvements have had permits.

 

[Johnny Rock]

When I built my house we had an electrical inspection and that's it. That's all that was required.

I would check further.

To literally build a house.

Rural MN. Pay the County for a Building Permit and the only inspection was electrical. I guess technically they did come out before we broke ground to make sure we were at least 200' back from the lake. So quick with the BS flag. Do you think I had 15 different inspections along the way but wanted to lie and post that we only had electrical?

 

[mr roboto]

When I built my house we had an electrical inspection and that's it. That's all that was required.

I would check further.

To literally build a house.

Rural MN. Pay the County for a Building Permit and the only inspection was electrical. I guess technically they did come out before we broke ground to make sure we were at least 200' back from the lake. So quick with the BS flag. Do you think I had 15 different inspections along the way but wanted to lie and post that we only had electrical?

I find it hard to believe there was no inspection of structural framing and plumbing at least. Sorry for the insult.I'm from rural MN and while it's different, I would imagine building codes can't be that lax.

 

[avoiding injuries]

I recently did a pretty ridiculous basement and didn't pull permits. If I were you, it wouldn't matter to me as long as it passed inspection.

 

[MAC_32]

I recently did a pretty ridiculous basement and didn't pull permits. If I were you, it wouldn't matter to me as long as it passed inspection.

Who did the inspection? And if you're looking to sell in the future an appraisal is not the same as an inspection. The bank may look at that and say we won't approve financing.

 

[Gamma1210]

When we bought our current house, we asked for COs on apparent modifications. So, from that standpoint, you could have trouble selling the house if a future buyer demands a CO. From what we were told at the time, some modifications could trigger alarm during the appraisal (such as an extra kitchen in the basement or an extra half bath), making complications for loan approval.

More concerned about the town dropping the hammer. Do they do any type of inspection when selling?

This will definitely be regional, but I don't think our fairly uptight town did an inspection. Not as uptight as Otis' Pod-permit town, but ours requires a permit to build a shed.

Are you worried about the town killing your current deal, or killing it later when you try to sell?

Later on. I'm a ways from selling, but its always been in the back of mind. Most of the stuff I've done is just remodeling with some minor electrical work or plumbing, but I have added a little addition for a pantry on the side where a porch used to be which is my biggest concern.

You'll only have a problem if you changed what was on the survey. Was your porch on the survey when you bought? It's town by town in NJ but both my parents and I have done tons of unpermitted work in nj on our houses. Usually the only thing required for a CO is correct smoke alarms and fire separation. One time they had to add a gfi on an outlet near a sink.

 

[avoiding injuries]

No inspection. And I doubt it. I sold a house 3 years ago in which I finished the basement without a permit. Added a bathroom and bedroom down there too. No issues.

 

[avoiding injuries]

I recently did a pretty ridiculous basement and didn't pull permits. If I were you, it wouldn't matter to me as long as it passed inspection.

Who did the inspection? And if you're looking to sell in the future an appraisal is not the same as an inspection. The bank may look at that and say we won't approve financing.

By inspection, I meant the inspector the buyer will hire during the buying process.

 

[Dragons]

I recently did a pretty ridiculous basement and didn't pull permits. If I were you, it wouldn't matter to me as long as it passed inspection.

Who did the inspection? And if you're looking to sell in the future an appraisal is not the same as an inspection. The bank may look at that and say we won't approve financing.

By inspection, I meant the inspector the buyer will hire during the buying process.

My inspector tested drains for backups and leaks and outlets for polarity issues, but did not inspect plumbing or electrical wiring. They are not opening walls.

 

[MikeMan]

In my experience, not a big deal, not a small deal...nothing.

The city wants permits so they can collect more fees and taxes. It has nothing to do with the quality of work.

I finished mine using some contractors..no permits.

My buddy did his by himself..no permits.

Appraisal or bank certainly isn't going to care. They want to validate the selling price can be substantiated.

How you write up your sf when selling varies by location - some places take the sf seriously, others don't, but whether a permit was pulled won't factor in that either.

I live in KS.

 

[Rattle and Hum]

When we bought our current house, we asked for COs on apparent modifications. So, from that standpoint, you could have trouble selling the house if a future buyer demands a CO. From what we were told at the time, some modifications could trigger alarm during the appraisal (such as an extra kitchen in the basement or an extra half bath), making complications for loan approval.

the house I'm looking at has an extra kitchen in the basement. The current owners added a full bath and the kitchen appliances.

in terms of $/sf, this house is quite a bit more pricy than other houses on the street, that presumably don't have a basement. The asking price only makes sense if you consider the basement as usable space. Including basement sf, the asking price for this house is $110/sq ft. Excluding the basement, it's $139/sf. By ways of comparison, 2 houses down sold in April of 2013 for $112/sf, no basement.

I'm concerned about two things:

(1) appraisal - use basement sf or not?

(2) unpermitted = uninspected = potentially unsafe.

In Michigan, a finished basement is not worth the same as additional sf above ground. If a good comp sold for $112/sf I cannot see shelling out $112/sf for the finished basement area. Maybe shell our $112/sf above ground and only $20/sf extra for the finished areas plus depreciated cost of the foundation/basement. That way if there are problems down the road you haven't drastically over-paid for the finished area. As stated by others, there are possible financial risks that you probably should not wear at $112/sf but a smaller price tag might make it worth the risk. If I was the seller I would not want to open this can of worms with in a contingency for permits. GL

 

[belljr]

I live in NJ - bought my house finished basement was listed.

Inspection - bought house

Tax peeps contacted me they have no record of the basement finished.

They come out and inspect - bumped my tax assessment by 10k

We only have sheetrock, and a drop ceiling. I guess it depends on if your work did require permits

 

[moleculo]

so my wife saw the house today...terrible apparently. Small rooms, rotten wood on exterior, house smelled. The smell is a common issue here; that's why we didn't buy a house w/ a basement here last time around - almost every Charlotte house w/ a basement I've seen, the basement smells musty.

So, thanks all for the replies, but this house is a no-go for us.

 

[mr roboto]

so my wife saw the house today...terrible apparently. Small rooms, rotten wood on exterior, house smelled. The smell is a common issue here; that's why we didn't buy a house w/ a basement here last time around - almost every Charlotte house w/ a basement I've seen, the basement smells musty.

So, thanks all for the replies, but this house is a no-go for us.

I'm assuming I can still invoice you for the consulting work, right?

 

[moleculo]

so my wife saw the house today...terrible apparently. Small rooms, rotten wood on exterior, house smelled. The smell is a common issue here; that's why we didn't buy a house w/ a basement here last time around - almost every Charlotte house w/ a basement I've seen, the basement smells musty.

So, thanks all for the replies, but this house is a no-go for us.

I'm assuming I can still invoice you for the consulting work, right?

of course. you can expect payment in eleventy working days.

 

[mr roboto]

so my wife saw the house today...terrible apparently. Small rooms, rotten wood on exterior, house smelled. The smell is a common issue here; that's why we didn't buy a house w/ a basement here last time around - almost every Charlotte house w/ a basement I've seen, the basement smells musty.

So, thanks all for the replies, but this house is a no-go for us.

I'm assuming I can still invoice you for the consulting work, right?

of course. you can expect payment in eleventy working days.

Net 15 or gtfo.