Building Permits Pay Off For Sellers
Taking care of maintenance tasks before selling usually improves a home’s overall appeal, which can attract more buyers for a quicker sale at a higher price. Sellers typically do pre-sale fix-up as quickly and inexpensively as possible, but beware that these cost-cutting measures, can have unwanted consequences.
Some homeowners consider bypassing the permit process because it is a typical way to keep costs down and decrease the time it take to complete the project; but consider the consequences of taking this route…
A homeowner expanded his home to increase its market value. He used a licensed contractor but did not pull the required building permits. The house went under contract for a good price, but when the appraiser evaluated the property for the buyer’s lender, he reduced the valuation on the addition because it hadn’t been done with permits. Because of this, the house did not appraise for the price the buyer offered.
To save the deal, the seller applied for permits after the fact. He not only had to pay the permit fees he’d hoped to avoid, he also had to pay penalties. In addition, walls had to be opened so that the inspector could confirm that the plumbing and electrical were properly installed. It might have taken a little more time to do the job right the first time, but it definitely would have cost less.
Other issues come into play when sellers sidestep the permit process. Some municipalities won’t issue a final approval for work done with permit if there is a building code violation…
A homeowner obtained a permit to replace and relocate a gas furnace. When the city building inspector visited the property to inspect the furnace installation, he noticed electrical wiring near the furnace that did not meet the code. A contractor from a different city, who didn’t apply for a permit, had done the wiring years before and obviously wasn’t well-informed on the code requirements of this area. The homeowner had to have the electrical wiring corrected before the city inspector would issue a final clearance for the furnace installation.
If you buy a home where work was done without required permits and you take out a permit to do additional work, you could find yourself paying to correct the past owner’s misdeeds. To guard against this, visit the local planning or building department and ask to see a copy of the permit history on the property. Make sure that you do this before you remove your inspection contingency from the purchase contract so that you’ll have an opportunity to negotiate a satisfactory resolution if there is an issue.
Depending on where you live, you may not be granted a new permit if there is an outstanding permit that has not received final approval.
To find out if a project requires a permit, consult with your local building or planning department.
If you are considering a remodeling project, call or visit one of our showrooms and speak with a certified designer for a complimentary consultation.