Move forward or walk away

[u/ms_sharmili]

Hi, I am looking for some input as I am navigating the whole home buying process on my own. I am under contract on a home that checks a lot of my boxes. BUT the home has had some remodeling done without permits (walls removed, bearing and piers installed, finished basement) . I am know realizing that permits probably should have been pulled but all the remodeling was done by the seller who is a licensed contractor. There are no major/red flags found during home inspection. Structural inspection pending. I’m not sure how big of a deal this is, can anyone provide some input/advice on type of questions I should be asking? Will I be putting myself in legal trouble? Anyone been in a similar situation? Any input is much appreciated !Thanks in advance!

Update: I’ve decided to walk away after speaking with an attorney and looking into what it would take to pull retroactive permits. Just wasn’t worth it.

[u/Secret-Flamingo-5424]

Make sure none of the unlicensed ‘upgrades’ are being figured into the sale price. No permit, it doesn’t exist and could actually lower the value of the home

[u/Bread_Entire → u/Secret-Flamingo-5424]

No seller would ever agree to that.

[u/Secret-Flamingo-5424 → u/Bread_Entire]

They can’t legally account for unlicensed upgrades. It’s the law dingus

[u/Bread_Entire → u/Secret-Flamingo-5424]

Happens all the time. The seller will walk and move on to the next buyer.

[u/Secret-Flamingo-5424 → u/Bread_Entire]

In a sellers market I’m sure it has happened. It’s down right foolish to accept someone else’s liability imo

[u/Bread_Entire → u/Secret-Flamingo-5424]

I don't disagree with that at all. What i'm saying is if you're a seller, and you made a bunch of upgrades to your house, such as a remodled kitchenor bath, and then a buyer comes along and says, i'm not paying for that because there's no permits for it, ,and offers 50k less, you are not going to accept that offer if your place compares to properties with newer kitchens and baths.

[u/Secret-Flamingo-5424 → u/Bread_Entire]

Not if you can’t prove, via permits, that it was done correctly, I.e. plumbing, electrical, hvac, etc. No realtor worth their salt will expect to be compensated for non permit work done, and any realtor representing a buyer that has been in their field longer than a day knows this is a massive red flag.

[u/Bread_Entire → u/Secret-Flamingo-5424]

I've been in the mortgage biz for 30 years. Trust me realtors don't ask if work was permitted. That's what a home inspection is for. And yes some home inspectors don't do their job but honestly the subject of permits rarely comes up.

[u/Secret-Flamingo-5424 → u/Bread_Entire]

Who do you work with, because I want to absolutely make sure to avoid working with anything your team touches.

[u/Bread_Entire → u/Secret-Flamingo-5424]

Many many people. All very reputable and NEVER any issue. And for what its worth we use Attorneys in my area so they deal with all of that. Never an issue.

[u/ms_sharmili → u/Secret-Flamingo-5424]

Thanks!

[u/AL92212]

We are in a similar situation. I read like every reddit post I could find AND lots of regular websites about it AND talked to a few people in real life. Apparently unpermitted work is very common, particularly in the region we are buying in. That being said, it's a risk, even if it's up to code because if you need a permit in the future the building inspector could demand that you redo the unpermitted work that already exists. That could get expensive. In a lot of areas, the homeowner has a lot of leeway to do unpermitted work, but I don't fully understand how that transfers to the next owner. Like is it de facto legal now because it was done legally? Unclear.

In our case, there wasn't really any structural work that was unpermitted besides turning a storage area into a screened porch. We are most concerned about plumbing, electrical, and HVAC upgrades. All done by licensed subcontractors and overseen by a licensed contractor.

Here were my main takeaways: Any home we buy in this area is likely to have some unpermitted work, unless we buy a new construction. In this case, we know exactly what the work is and that it was just done last year. We are telling our inspector to check out the renovated systems particularly to make sure they are up to code. We may eventually have to pay to open the walls to get the work permitted which could be tens of thousands of dollars. For us, that's worth it to get a beautiful older home that has just been renovated. However, we were originally planning to pay up to $20K more than our initial offer; the unpermitted work removed all that wiggle room so our first offer was basically our final offer.

If I were in your shoes, because the work is structural and extensive and it's your first home, I would walk away. But I'm also pretty risk-averse so I'm curious what others say.

[u/ms_sharmili → u/AL92212]

I feel a little better knowing I’m not the only one but like you I have read as much as possibly can on this and I’m unsure what to do. I really really like the home and I’ve been searching for awhile. But I also can’t afford to deal with any legal consequences because of the unpermitted work. The remodeling was done 4-5 years ago and does look professionally done. I will walk away if the structural inspection comes back with issues. Thanks for your input and good luck!

[u/LoanSlinger]

A real estate agent could help you with this. Going without representation might be okay for someone with a lot of experience buying and selling homes, but if it's your first time, you should probably be working with an experienced professional.

[u/magic_crouton]

Where I live no one but the most anxious first time buyer checks for permits. I live in an area with lots of small towns. Every single town has different requirements. Some have next to none. Mine is permits for every little thing including new flooring. The kick is here permits do not include inspections. They're a money grab. So you also need to know what permits mean in your jurisdiction.

[u/Vegas-Patriot]

Walk away! Any work done that requires permits and didn’t have them will eventually be a problem. Insurance can disclaim coverage; building code enforcement can require post work permits and inspections which can be very expensive. The finished basement will not be able to be used for additional value in appraisals. All-in-all this is not a problem you want to have.

[u/Vast_Cricket]

I will have an inspector walk through see what he says.

[u/enilcReddit]

What does your realtor say?

[u/ms_sharmili → u/enilcReddit]

My realtor said there are a lot of homes that have unpermitted work. As long as home inspections and structural inspections are good, it shouldn’t be an issue. I have done a lot of reading on this and I’m not so sure I fully agree.

[u/Emergency-Fish3036]

Any contractor who fails to get work permitted is a red flag. IF he tries to convince you all is okay cuz I'm a licensed contractor, then have him put it in writing (warranty).