There are many risks of buying a home with unpermitted work, so it's very important to be aware of this issue. What's surprising to many is although a home inspection is ordered by the buyer or seller, there's just no guarantee the licensed professional will discover work done without a permit. Some sellers are even shocked to discover unpermitted work, having bought the property years before because the previous owner did not disclose the fact. However, when it is a known issue, buyers should heed the latin phrase "caveat emptor" or "buyer beware."
Risks of Buying a Home with Unpermitted Work
The problem with unpermitted work is there is no one-size-fits-all solution. It's unique from home to home for a variety of reasons. First, county building authorities have different codes and acceptable standards. In addition, some work done in the past might not fall under a grandfather clause because it does not meet previous or current code. The quality of the actual work will also play a role in the process.
Many homeowners will simply try to pass off a house to unsuspecting buyers without disclosing unpermitted work and let them deal with the consequences. Of course, there's a chance your clandestine maneuver may have been discovered anyway by a closing agent, title company or home inspector. That's because deed records and tax-assessment districts typically have legal descriptions showing the number and types of rooms a house contains. A second bathroom, though professionally constructed, may have stuck out like a red flag in a cursory examination of those documents. --Bankrate
Looking for a new home is an exciting experience and one with a lot of expectation. It takes time to actually get to the house hunt, going through and cleaning credit files, saving for a down payment, earnest money deposit, inspections, and closing costs. Once the time comes to visit homes in-person, a fever sets in and buyers want to find a great home, with all the bells and whistles. Finally, they discover their dream home and learn there is unpermitted work, which brings on big time anxiety. Now, the question whether or not to proceed needs to be answered and this is why it's important to know the risks of buying a home with unpermitted work:
- Legal liability passes to the buyer. If you do go through with the sale without first addressing unpermitted work, understand the legal liability to disclose it at resale now passes to you (if you do not or cannot rectify the situation). Keep this point in mind because it is possible the work cannot meet the code standards as-is.
- Need to obtain a permit. In some instances, the seller will make concessions, such as offering to pay part of the closing costs and lowering the price to make the sale. But if the seller is unwilling to make the work legal, you're right back to receiving the legal liability.
- Costly modifications. Another thing to consider is the risk of it being expensive to fix. It could be very costly to resolve the situation after you've gone through with the purchase. In this scenario, you are taking on all the financial responsibility.
- Safety hazards. There are common reasons homeowners forgo the permitting process. Chief among these are cost reduction and poor DIY work. Though permits are not generally expensive, saving on the total cost is too tempting and subpar work can pose a safety hazard.
- Buyer's remorse. Unfortunately, the problem might be even larger, more widespread throughout the home. It's at least a possibility there is more unpermitted work done in other parts of the house. If this is the case, you are unwittingly purchasing a mountain of buyer's remorse.
If you are looking for a home in the Rancho Gabriela neighborhood, whether it's around West Cholla Street, West Gabriela Drive, or North Bullard Avenue, or anywhere else in Surprise, Arizona, give us a call to learn more about the home buying process and we'll help you find the right place.