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

Introduction

If you’re reading this, you’re probably dealing with the stress and uncertainty of a home sale that involves unpermitted work. Whether you’ve completed some renovations or inherited a property with modifications that were never formally approved, you might be wondering: How does this affect the sale of my house? You might be questioning whether the work you did will lower the price of your home, complicate negotiations, or even cause a sale to fall through entirely. You’re likely concerned about how to navigate these challenges without losing money, time, or peace of mind. You need answers to specific questions: What is unpermitted work? Will it cause my buyer to back out? How can I sell my house quickly if it has unpermitted work?

In this blog, we’ll explore what unpermitted work is, how it impacts your home sale, and why selling to a cash buyer may be your best option in this situation. You’ll get the crucial insights you need to make an informed decision and avoid unnecessary complications.

What Is Unpermitted Work?

Unpermitted work refers to any construction, remodeling, or improvement on a property that was done without obtaining the required permits from the local government or building authority. In most areas, certain types of work—such as electrical wiring, plumbing, or adding a room—require permits to ensure the work meets safety standards and local zoning laws. Without these permits, the work is considered “unpermitted.”

When sellers try to sell a home with unpermitted work, they often face unexpected challenges. Buyers may be wary of unpermitted work because they are unsure whether it meets code or could lead to costly repairs. If you’re trying to sell your home in this situation, it’s important to understand the potential impacts on the sale.

For example, imagine you added a deck to your home without pulling a permit. Now, when you try to sell, the buyer might want to ensure the deck is safe and up to code before closing. If it turns out that the deck was improperly built or that it doesn’t meet the required standards, it could lead to a delay in the sale or force you to pay for costly repairs to bring it up to code.

For more information on building permits and why they matter, refer to HCD’s Guide to Permits and Inspections, which offers valuable insights on when and why permits are necessary for home renovations.

To understand how to handle unpermitted work and get the most out of your home sale, check out our How to Sell a House With Unpermitted Work in California guide for more detailed insights.

How Unpermitted Work Affects the Value of Your Home

Unpermitted work can have a significant effect on your home’s value. In many cases, buyers will expect a discount because they fear the work may need to be undone, or worse, lead to penalties or fines. A study by the National Association of Realtors found that homes with unpermitted work can be devalued by as much as 20% in certain markets. The perceived risk of having to bring the work up to code or deal with local authorities can make buyers hesitant.

In addition to devaluation, unpermitted work could lead to unexpected costs for the buyer. For example, if a buyer needs to get the work inspected and permitted post-purchase, they may face substantial fees. On average, homeowners can expect to pay anywhere from $500 to $3,000 or more to permit unapproved work, depending on the type of renovation and location.

Even though you may have invested time and money into these improvements, they might not add any true value when buyers are concerned about the lack of permits. This could make negotiations difficult, leading to lower offers or lengthy back-and-forth discussions that delay your home sale.

Why Selling a Home with Unpermitted Work Can Be a Complicated Process

Selling a home with unpermitted work can involve a lot of hurdles. The most common complication is the buyer’s need for an appraisal or home inspection. A conventional buyer may rely heavily on an inspection report, and unpermitted work could raise red flags, forcing the buyer to either renegotiate or walk away.

Furthermore, mortgage lenders often won’t approve a loan for a property with significant unpermitted work because they view it as a risk. Even if a buyer is willing to take on the risk, they may not be able to secure financing, leaving you with fewer interested parties and longer time on the market.

Cost to you: If your buyer needs to bring the unpermitted work into compliance, you may be asked to cover the cost of retroactive permits or repairs, which can be extremely expensive. These repairs could range from $1,000 to $10,000 or more, depending on the scope of the unpermitted work and the local building codes.

In some cases, homeowners may be able to negotiate the cost with a buyer, but this often leads to a lower final sale price. Selling a property with unpermitted work is undeniably more complicated, and it’s important to understand the potential costs and delays you may face.

How to Sell Your House with Unpermitted Work: The Cash Buyer Advantage

One of the most efficient ways to sell a house with unpermitted work is by selling to a cash buyer. Cash buyers, like real estate investors, are often more willing to purchase properties with issues like unpermitted work because they can handle the repairs themselves. They aren’t as concerned with permits or appraisals as traditional buyers, making them an ideal option if you need to sell quickly and avoid the complexities of traditional home sales.

Additionally, cash buyers usually buy homes “as-is,” which means you don’t have to worry about getting permits or making expensive repairs. This can be a major relief if you’ve already spent time and money on unpermitted work and want to move on without further complications.

On top of that, selling to a cash buyer typically involves a faster closing process. Unlike conventional buyers, cash buyers don’t need to wait for bank approvals or appraisals, so the sale can be completed in as little as 7 to 14 days, helping you avoid the extended waiting periods and delays that come with traditional home sales.

Selling a home with unpermitted work to a cash buyer can also reduce the chances of a deal falling through. The certainty and simplicity of a cash transaction can provide peace of mind, especially when dealing with potential issues that could derail your sale.

Conclusion: Why Selling to a Cash Buyer Might Be Your Best Option

If you’re dealing with unpermitted work, traditional home selling methods can feel like a maze of complications and delays. Unpermitted work can lower the value of your home, cause financing issues, and ultimately lead to a sale falling through. While you may try to fix the problems yourself, the costs can be prohibitive and the results uncertain.

Selling to Bay Area Home Offers offers a solution to these challenges. A cash sale with Bay Area Home Offers allows you to sell your home quickly and without the burden of repairing or permitting unapproved work. We purchase homes in any condition, taking on properties with unpermitted work, and providing you with a fast, hassle-free sale. If you need to sell your home and avoid the headaches of unpermitted work, Bay Area Home Offers is here to help make the process seamless and straightforward.

Reach out to us today to get a fair, no-obligation cash offer for your home.