What Is Unpermitted Work and How Does It Affect Home Sales?

How Does Unpermitted Work Affect Home Sales?

Introduction

If you’re reading this, you’re probably facing the dilemma of unpermitted work in your home and wondering how it will affect your ability to sell. Maybe you’re thinking about making repairs or fixing the issue before listing your property. Or, perhaps you’re concerned that these violations might prevent you from selling the house altogether. You may have heard that unpermitted work can lower the value of your property or cause complications during the closing process. Whatever the case, you’re looking for answers, reassurance, and maybe even some insight into how to sell your home as-is.

In this blog, we will cover everything you need to know about unpermitted work, how it can affect the sale of your home, and the pros and cons of various approaches—especially whether selling your house for cash could be a smart solution to bypass these hurdles. Keep reading for detailed information that directly answers your most pressing questions.

What Is Unpermitted Work?

Unpermitted work refers to any renovations, additions, or changes made to a home that were not authorized by local government authorities. These could be anything from adding a new room, finishing a basement, installing a pool, or even electrical and plumbing work. Typically, any time a homeowner makes changes to a property, a permit is required to ensure that the work complies with local building codes and safety standards.

For example, if you added a bathroom to your house without the necessary permits, it would be considered unpermitted work. The same goes for building a deck, finishing your attic, or putting in a new kitchen without informing the city or county. In short, unpermitted work refers to any home improvements that were done outside the legal framework.

You can read more about the specific permits required for home renovations in your area by visiting The Home Renovation Permit Guide from Sinkology.

Why Does Unpermitted Work Matter in Home Sales?

Unpermitted work can be a huge red flag to potential buyers, inspectors, and appraisers. In many cases, buyers and lenders are hesitant to deal with properties that have code violations, as they fear issues with safety, structural integrity, or financial liability in the future. If the work done was subpar or not up to code, it could cost thousands to correct, which is why buyers are wary.

Additionally, when your house is appraised for sale, unpermitted work can lower its value because it might not be included in the official square footage or features of the home. For instance, if your finished basement was not permitted, the appraiser may only consider it as raw space, which could significantly reduce your home’s market value.

How Does Unpermitted Work Affect the Selling Process?

When selling a home with unpermitted work, you’re bound to encounter a few challenges. The most significant hurdles are:

  1. Buyer Reluctance: Many buyers simply won’t purchase a house that has unpermitted work because of the uncertainty it brings. Whether it’s issues with code violations or concerns over hidden problems, unpermitted work can make the house harder to sell.
  2. Reduced Property Value: Even if you do find a buyer, the price you can expect to get may be significantly lower. Many buyers will factor in the cost of legalizing the unpermitted work or fixing the problems, which means your asking price might not match the actual value of the home.
  3. Complicated Financing: Most lenders will not approve a mortgage for a home with unpermitted work. If the work was significant enough, it might prevent the buyer from securing financing altogether. This can result in you having to find a cash buyer, which is why it’s so important to consider this option.
  4. Delays and Inspection Issues: If the unpermitted work is discovered during a home inspection, it could cause delays in the closing process. The buyer may ask you to fix the issues, or in some cases, the deal might even fall through.

Example Scenario: How Unpermitted Work Can Affect a Sale

Let’s say you finished your basement without permits and decided to sell your home. During the inspection, the buyer’s appraiser notices the addition and flags it as a violation. The buyer’s lender may refuse to issue the loan, as the unpermitted work raises concerns about its quality, safety, and compliance with local building codes.

Now, you’re stuck with two options: either spend thousands to fix the issues or sell your home for cash. The first option could delay your sale for months, while the second option could offer a quick and hassle-free solution.

Can You Sell a House With Unpermitted Work?

Yes, you can sell a house with unpermitted work, but the process may be more complicated than selling a home that is fully compliant with building codes. Understanding how to navigate this process is crucial for any seller with unpermitted work on their property.

In many cases, it’s possible to sell the house as-is, but it comes down to your buyer’s preferences and the type of offer they are willing to make. Cash buyers, like those who purchase homes in “as-is” condition, tend to be more flexible and willing to overlook unpermitted work.

What Happens When You Sell to a Cash Buyer?

Selling your house for cash is often the quickest and easiest way to move forward if you have unpermitted work. Cash buyers are typically real estate investors who are experienced in handling homes with issues like code violations and unpermitted work. They understand that these problems may require costly fixes, but they are willing to make a fair offer and purchase the home without requiring any repairs or legal work.

Advantages of Selling to a Cash Buyer:

  • Quick Closing: Cash sales can close within as little as a week, while traditional sales can take months.
  • No Repairs Required: You can sell your home in its current condition, saving you time and money on repairs.
  • Certainty: Cash buyers are less likely to back out of the deal because they’re not reliant on financing or mortgage approval.
  • Avoid Legal Hurdles: Since cash buyers are typically investors, they’re not concerned with permits and code violations, making the process much smoother.

Example: Let’s say you need to sell your home fast due to relocation or financial reasons. If your home has unpermitted work, you may struggle to find a traditional buyer who can secure financing. By choosing to sell to a cash buyer, you avoid the headaches of repairs, inspections, and potential financing issues.

You can learn more about how to sell a house with unpermitted work and navigate these challenges by visiting our page on How to Sell a House With Unpermitted Work in Georgia.

Should You Fix Unpermitted Work Before Selling?

Deciding whether or not to fix unpermitted work before listing your property is a tough call. On one hand, correcting the issues could help you fetch a higher price for the home. On the other hand, repairs can be costly, time-consuming, and may not provide a return on investment.

Costs of Fixing Unpermitted Work

The cost of making unpermitted work legal can vary widely, depending on the type of work and the local building codes. For instance:

  • Adding a Room or Extension: $10,000 – $50,000+ depending on the scope of the addition and local permits.
  • Finishing a Basement: $20,000 – $50,000 depending on the size and finishes.
  • Electrical/Plumbing Work: $5,000 – $20,000, depending on the complexity.

In many cases, the cost to fix these issues will exceed the return you would get by raising your asking price. Moreover, the process of obtaining permits and passing inspections could take weeks or even months, which delays your sale.

When Fixing Is Worth It

If you’re planning to sell to a traditional buyer, fixing the unpermitted work may be worth it, especially if the work is relatively minor or you can obtain permits easily. However, if time is of the essence, or if you’re unsure whether the investment will pay off, selling for cash could be the better route.

Conclusion: Is Selling for Cash the Right Option?

In conclusion, unpermitted work can significantly complicate the home-selling process. While it’s possible to sell a house with unpermitted work, finding the right buyer can be challenging. If you’re looking for a fast, hassle-free solution, selling for cash may be the best option.

Not only does it allow you to bypass the headache of making repairs and dealing with inspectors, but it also offers you a fair price for your home without the risk of the deal falling through. Plus, you avoid the potential financial burden of legalizing unpermitted work.

If you’re ready to sell your house quickly, even with unpermitted work, reach out to P&D Property Management, LLC for a no-obligation cash offer. We specialize in purchasing homes as-is, including those with unpermitted work. Get started today and avoid the stress of dealing with permits, repairs, and lengthy negotiations. Contact us now to find out how we can help you sell your house for cash, hassle-free.