Homeowners in Washington can find themselves on the receiving end of a pretty rough deal when unpermitted home improvements have been made to their property. Whether that involved adding a deck, finishing a basement, or even much more minor renovations, it can really complicate the situation they find themselves in when they are looking to sell.
The law usually requires that all but the most minor work done to a property be permitted, or at least documented, and signed off on by local housing authorities. That means that if you don’t, they could fine you and you could run into trouble also when you go to sell it. You might also have trouble with your homeowner’s insurance company if this happens.
Here’s how it can usually go for other homeowners in Washington who go to sell a house with unpermitted work.
One option is to just tell the potential buyer upfront that the house may not be up to code. Then they can make the decision whether they want it or not. This can lead to more trust than would usually be normal with a buyer, but it might scare them off, and it will also mean that you probably won’t be able to expect to get quite as much for it.
Another option is to just bite the bullet, get it permitted, and hope for the best. This could just be a simple fix: you submit a report (or two) and let them come to take a look at your house as if you had submitted those reports when you had done the work. If nothing goes wrong and nobody comes and gives you a sanction, then you will only have to pay a small permit fee or two and a little bit of your time.
This is an option where it might depend a little on the area. If it were on the old west coast, for example, it might not be anywhere near as possible as you may want it to be to get a “permit after-the-fact” in cities such as Seattle or others where they may be just a little bit more sensitive about this.
In the majority of most other cities in Washington, however, there is another option: to sell your home to a cash buyer. At the very least, this will get you an absolutely no-nonsense offer on your home with no obligation to you whatsoever. It can even be done in just a manner of minutes at a time which is convenient to you.
This is a certain “way out” of the problem and will allow you to move on with your life, get the equity back where it belongs (it’s yours, right?), and get back onto the path to financial success. People don’t need your neighbors and the local municipality to have their little financial successes. You can have your financial freedom again!
In fact, laws regarding code compliance vary quite a bit and not every house will be eligible for this solution. Many cities are quite a bit more strict than are others, so it would be a good idea to be aware of this and see what you can do to benefit the most financially. By looking at all of their options, including potentially selling as-is, they can make an educated choice that aligns with their situation and their financial intentions.
Understanding Unpermitted Work
Unpermitted work encompasses home improvements of all types — from new construction and major remodels to simple jobs such as decking—that have been performed without the necessary permissions from local authorities.
Many people who neglect to go through the official channels for building do so not because they’re trying to make a quick buck or because they’re dodgy, but because they don’t want the added time and expense. And that’s a shame, because you open yourself up to many potential risks.
The first and arguably the most important risk associated with unpermitted work is the risk to life and person. Building codes exist for your safety and the safety of others. When structures are built or modified without meeting new code, the safety of the structure is in question.
Selling a property with a built-without-permit problem can cause major headaches in the long run. You may end up having your house last longer on the market, or the selling price can take a major hit.
Should you decide to ignore a building authority’s ruling or not register the change in your property at all, you run the risk of having to pay fines for the unpermitted work that will continue to grow until you do pay. The ensuing legal battle can also be quite drawn-out as you wait for a resolution to come to head ; until then, you’ll likely be unsure of what can be done with the property. To escape this risks, homeowners must learn this one lesson: never undertake a significant home renewal project without first pulling the necessary permit(s).
The Legal Landscape in Washington
In the state of Washington, unpermitted work can affect a property’s value and whether or not the home is marketable.
Unpermitted work means that certain work has been done to the property — anything from adding a deck to an existing structure, to finishing a basement — without going through the proper processes to get it inspected by city officials and approved.
Knowledge of unpermitted work on a property changes a person’s experience of selling the property for several reasons:
First, you could be required to alter previous renovations, take the property back to its original condition before the work was done, or pay other penalties imposed by the city. For many potential buyers, this obligation could be very off-putting. Therefore, after taking this variable into consideration, the price you would set for your house would be lower than you would have chosen if this was not an issue.
Second, you are required to disclose the existence of unpermitted work to interested homebuyers after they tell you they want to buy your house. This area is the main point of the negotiation at which a lawsuit for misrepresentation of a property could be claimed against you – this is another reason why future homebuyers may be reticent to buy your property. Thus, encouraging a possible future homebuyer to buy your property at a certain price may be more of a challenge than for other property sellers, because of this same reason.
Last, a property is required to be up to code in order for its seller to receive approval for a mortgage that the property funds will go toward. Gaining this pre-approval is the goal of many people with the status of “I want to sell my house” who are preparing to sell the property and who don’t know the best time of year to sell a house. By “coming clean” about any unpermitted work, sellers can avoid possible legal problems, increase the selling features, and probably have a far more successful home sale.
Selling a House with Unpermitted Work
If you are a homeowner trying to sell a house with unpermitted work, you might have a few options to weigh.
- Fix the Unpermitted Work – This option requires you to take on the task of obtaining all of the necessary permits needed to bring the house up to code. The good thing about that is it will automatically increase the value of your house. The floor replacement that your Uncle Henry did or the room addition that was put on by a contractor no longer in business will all be up to code and ready for a new buyer. This also means you will have some time and money to invest in getting everything repaired and inspected.
- Sell Your House As-Is to a Trusted Home Buying Company – Often, these companies, like my own, will buy your house in practically any condition. This option alone is a great alternative for those creating a strategy to help pay for care costs or needing to exit the house quickly due to financial concerns or something dire, such as immediate level-of-care needs. You also won’t have to worry about most of the factors associated with selling real estate. You won’t have to deal with nosy buyers, lookie-loos, or buyers with cold feet, backing out at the last minute due to financing issues. You won’t have to worry about negotiations, stressful drawn-out transactions, showings, etc. You will likely get a fair cash offer on your house and get to choose the closing date, all in record time.
Your goals just might dictate what direction you take; however, it’s important to note that you have options. Whether you want to fix the unpermitted work or not, totally up to you.
Pros and Cons of Selling a House with Unpermitted Work
There are pros and cons to selling a house with unpermitted work.
Some homeowners may think that they want a quick sale, and so they don’t consider anything else. They think that the right buyers want a home they can move into right away, and those buyers will work out any permitting issues later—especially if it’s a hot market.
Sometimes it’s just easy for the seller. Under this scenario, you don’t have to jump through bureaucratic hoops with your city to give them money, argue with home inspectors or anyone else about what needs to be fixed or altered, or waste time or the resources of a new buyer going through the sales process.
But there are also many disadvantages of selling a home with unpermitted work.
If permits weren’t pulled, I can just see some intrepid young couple—with dreams of a new (yet cheap) home in the Los Feliz neighborhood of Los Angeles—skipping over these listings as they scroll through Zillow, lowering the number of offers the original buyer may get. And who knows what they can go through after the sale is complete? They may get fined initially, or they may have to fix the unpermitted work anyway. Only then do they have to take all of this into account, anyway.
What the original seller can do, however, is to market the unpermitted work well. By “well,” I mean to call it unpermitted work in the marketing material to get ahead of this problem for whoever is going to buy it next, and have a well-thought-out and valid reason that will mollify any current concerns. This will increase this young couple’s interest and trust in buying it.
Then, sellers should talk with a real estate professional who knows local regulations—and therefore, what he can and/or should get away with—not to go with a lower-priced closing offer, and leave money on the table. In the end, selling a house with unpermitted work can be a quick way out, but you should tread lightly. You know the dangers now, so do everything you can to prevent them from popping up. You’ll be putting yourself in a position to be one of the sales that gets through—not one of the sales that experiences complexities.
Preparing to Sell Your House with Unpermitted Work
Homeowners looking to list their property should first gather all documentation of improvements made to the home—permits, receipts, and warranties for renovations or repairs. Having this information at the ready shows prospective buyers the value you have added to the property and helps build an initial layer of trust. In this context, unpermitted work refers to an improvement or renovation project done to a house or apartment without receiving prior approval from the local governing body. It helps to be fully transparent about the history of the home, which could expedite the home sale process.
Second, work with a trusted real estate agent or broker who has some base knowledge of unpermitted work because it will definitely affect the saleability of a home. Most real estate agents can provide homeowners with great tips on listing homes for sale and understand the market conditions of the location. They can give sellers a better idea of what buyers are willing to tolerate in that area. And, they will be able to give the seller a fair price to start with when listing their home or apartment online.
I also wouldn’t count out getting a home inspection before listing the property online. A pre-listing home inspection allows sellers to identify any problems with a home or apartment prior to listing—especially if any problems with the home arise from previous unpermitted work in the home.
Homeowners must be aware of the implications of “unpermitted work” when selling a house. The term unpermitted work applies to any renovations or improvements the current homeowners have made to the house that were supposed to be permitted to be done, but the permission was not obtained from the local government. Virtually anything from adding a deck to finishing a basement in a house falls into the category of needing to be permitted. This puts potential buyers in an odd position. They know the home is probably not to code completely, and the home also may have a downgraded selling price because of the unpermitted work. Then, of course, a seller may be hit with fines from the local government for not obtaining permits and also, almost definitely, will be told to get permits for all the work, inspections or to rip out all that was unpermitted work. While this information is considered fairly general (in this article), speaking with home buying companies can reveal precise advice on the situation. As a rule, homeowners with this problem get great closings and all-cash offers from home buying companies. Alternatively, speaking with real estate agents or sending a picture or two to a real estate agent about the home to sell can minimize the disadvantages.