How to Sell a House with Unpermitted Work or Additions

Whether it's a finished basement, a converted garage, or a brand-new deck, home improvements are great—unless they were done without the proper city permits. If you are trying to figure out how to sell a house with unpermitted work, you need to know the risks and the best ways to bypass the red tape.

The Dangers of Unpermitted Work During a Sale

When you list a home on the traditional market, unpermitted work will almost always be discovered. Here is how it ruins deals:

• Appraisal Issues: Appraisers will not count unpermitted square footage (like a converted garage) toward the home's value. This can cause the home to under-appraise, killing the buyer's loan.
• City Fines and Tear-Downs: If the city finds out about the unpermitted work, they can issue massive fines or force you to tear the addition down completely.
• Liability: If unpermitted electrical or plumbing work causes a fire or flood after you sell, you could be held legally liable by the new owner.

Your Options for Selling

If you have unpermitted work, you generally have three options:

1. Retroactive Permitting: You can apply for "as-built" permits. This often involves tearing open walls so city inspectors can see the wiring and plumbing, paying penalties, and fixing anything that isn't up to code. It is expensive and time-consuming.
2. Demolition: You can tear down the unpermitted addition to return the home to its legal state.
3. Sell As-Is to a Cash Buyer: The easiest solution is to disclose the unpermitted work and sell the home as-is to an investor like Iron Oaks Property Group. We take on the liability and the hassle of dealing with the city so you can walk away clean.

Frequently Asked Questions (FAQ)