Have you completed renovations on your home, and you failed to get a building permit? Further, are you considering selling a house with unpermitted work? You will find that selling a home without the proper permits may negatively impact the buyer’s interest in the property and the buyer’s ability to pay for the house.
Most importantly, it is essential to disclose to potential buyers that a contractor performed unpermitted improvements on your house. Otherwise, you may experience legal issues for not disclosing any unpermitted construction.
Selling a house with unpermitted work is technically a relatively common practice. There are ways you can properly sell the property using some simple solutions. Below, you will learn the top ways to sell your place despite unpermitted additions. Now, let’s get started!
Selling a House With Unpermitted Work in PA
Do you know if your house has unpermitted work from the past? Homeowners should get a history of their property and see what type of upgrades it has. You may have forgotten to find out all the renovations and permit requirements your house underwent when you first bought the place. Now is the time to find out.
You may need to look over the original blueprints to see what permitted work was completed. If you do find that your home has unpermitted work, you will have two options in front of you. The two options are:
- Selling your house as is
- Acquire retroactive permits
If you decide to sell your house in its as-is condition, you will need to give full disclosure to the buyer. You need to disclose unpermitted work to all potential buyers. For instance, you may want to provide that disclosure in the listing.
Selling a house to cash buyers as-is can lead to an offer in only a few days and a completed home sale in several weeks. If you have paid for major home renovations without getting permits, you may need to lower the property’s asking price. Possible home buyers would prefer a lower asking price since they would take on the responsibility of the unpermitted work.
For instance, if you have built a second bedroom without a permit, you may want to list the house at the same price as a one-bedroom property. Since the current housing market favors sellers, more buyers are willing to purchase homes with unpermitted work.
You can also obtain retroactive permits after the home remodel is done. However, before you do so, you may need to hire a contractor who can give you an estimate of how much it may cost to get your property up to code based on local ordinances. The city may also remain lenient if you’re trying to obtain construction permits for a previous homeowner’s renovations.
In that case, you likely won’t need to cover any extra fees related to your retroactive permit, and you may have more time to meet deadlines to bring the home improvement projects or electrical work up to code.
The retroactive permitting process will include a city inspector visiting your home to check the renovations done and see if they meet the building code. The retroactive permit costs will likely include fixing up the work already done. You may need to open up a few walls or tear down and rebuild certain parts of the project.
What Is Unpermitted Work
Unpermitted work is essentially any upgrade done to a house, like a finished basement or a window installation, that would generally require a permit from your local building department, but you did not acquire a permit.
Even minor home improvement projects often require a permit, so you should always ensure your contractor checks whether new home renovations on your real estate property require permits.
What type of work doesn’t need a permit? Generally, interior painting, minor electrical work, and finishing floors won’t require you to get any building permits. However, even minor projects like installing a fence in your backyard or a new window may require you to get a permit.
Many homeowners may not know that minor repairs or installations may require permits, which can create a problem when putting a house on the real estate market. Ask the average real estate agent, and they will tell you that as many as 40 to 50 percent of all homes on the market have unpermitted work.
However, as long as you disclose the unpermitted work to the buyer, you should not have any legal trouble. Yet, you may need to lower the asking price to get more buyers interested in a house with unpermitted work.
Why You Need House Permits
Contractors need to obtain all relevant permits for a house renovation. Otherwise, contractors would end up violating their licenses. The Department of Business and Professional Regulation (“DBPR”) rules state that violating the regulation will lead to a $1,000 fine the first time and $5,000 to $10,000 for subsequent violations. The contractors would also lose their licenses.
Furthermore, contractors who fail to get home permits may lose payment from their customers. Without a building permit, the handyman may have been unable to meet the requirements in the contract. As such, customers may claim the contractor isn’t entitled to payment.
So, are there other reasons why building permits are important? Why are meeting zoning rules and getting relevant permits worth the hassle?
The main reasons for getting permits include the following:
- Protects the property value of your home
- Saves money from retroactive permits and further home inspections
- Reduces the challenges of selling the house
- Ensures the living conditions of the home remain safe
- The law requires it
The value of your property can drop if you don’t comply with the building codes in your community. You may also find that your property insurance company won’t cover any damages that occur on any property where contractors completed projects without permits or a home inspection.
When listing your home for sale, you must disclose significant renovations and whether they met building codes via permits. When selling a house with unpermitted work, you may have to tear down that extra addition or redo upgrades to meet building codes.
The most important part that showcases why you need a permit is reducing hazards and improving safety. Home buyers seek out houses with safe living conditions and construction that meet building codes. Not only will a permit ensure your family is safe living in your house, but it will make it easier to find home buyers when selling your place.
Most importantly, getting permits for construction projects is the law. To avoid costly repairs, get all relevant permits for home improvement projects.
Selling Your House ‘As-Is’
If you cannot get retroactive permits or don’t have time to complete renovations with new permits, you can try selling your house in its as-is condition. Even when selling your home in its current condition, you need to provide full disclosure to buyers about any unpermitted work.
However, prepare to have a lower asking price when selling as is. Properties needing more work can end up selling 15 to 20 percent below typical housing market value. Nonetheless, even houses needing renovations get sold quickly in the current seller’s market.
When selling as-is, you can bypass the home inspection, avoid working with a real estate agent, and no longer need to renovate the property. Instead, you can sell your house directly to a cash home buyer or a real estate investor in its current condition.
That way, you can avoid commission fees paid to a realtor and some other closing fees to pay when selling a house. You can also save on costs related to home improvement projects.
Besides selling your place in its as-is condition, you can try to get retroactive house permits for any work you’ve already completed.
Retroactive House Permits
A retroactive building permit application is not much different than a standard house permit. Both types will show whether any work done on a house aligns with building codes in a particular community. Inspectors will check the construction drawings of each renovation and inspect the home improvement projects.
Along with your application, you will need to add structural, architectural, electrical, mechanical, and plumbing diagrams. The drawings need the right dimensions and geometry, showcasing where contractors put certain additions.
If the home improvement project is extensive, you may need an engineer or a registered architect to approve the application and diagrams for the retroactive house permits.
A home inspector will also check whether the renovations align with applicable building codes. Follow a home inspection checklist to ensure the house sale will proceed smoothly.
Now you should know that selling a house with unpermitted work is possible and includes relatively straightforward steps. You can either try selling your house as-is or pursue retroactive house permits. Make sure to disclose any unpermitted work when selling the place.
Are you looking to sell a house fast in Aston in its as-is condition? Then consider finding real estate investors or cash home buyers in Pennsylvania. We buy houses Philadelphia residents love, so call us today!