Worried about selling with unpermitted changes to your home?

Much confusion exists with homeowners who either made significant changes or inherited a home with unpermitted changes. Are you required to have everything permitted before selling? What effect on your home’s value would obtaining permits have?

In the case where you purchased a resale home and you’re not sure if permits exist, it would be a good idea to confirm whether or not the city has any records. Don’t worry — it’s not like the city’s employees are looking for homes to place “red tag” violations on. Most cities have online records on their websites.

The most significant change to a home is a room addition. The difference in square footage can complicate an escrow if not handled correctly.

If you know permits don’t exist, don’t panic. You have options:

1. Apply for permits. Depending on how drastic the changes were, costs and time can vary from a few hundred dollars and a few months to several thousand dollars and over 1 year. If the changes to your home don’t comply with local building codes, they may require further construction.

2. Sell home without permits. In this option, if the construction is done in a “workman-like” manner, homeowners can often get away with disclosing the alteration to the home along with any information they may know.

In either case, it would be best to obtain the advise of an experienced agent before you decide. If you can imagine, a home built before 1980 is likely to have changed hands several times with many unpermitted alterations and additions. Many housing tracts built in the 1950s hardly resemble their original post-war designs.

Impact on value

A seasoned Real Estate Agent can help you anticipate possible issues. They’ll know if it’s appropriate to market the home with the additional square feet or alteration. Since appraisers will often verify if permits exist, your agent will need to have measures in place to comply with conventional, FHA, or VA financing that the buyer might obtain.

In many of the North Orange County cities, losing value on a room addition can cost you around $280 per square foot if you don’t plan correctly!