Adding structures, remodeling, adding new mechanical systems, roof, etc to your existing home with or without a permit has become a nationwide issue for the Real Estate Industry. If you added any of these items with the proper inspections and permits, then you are home free! If not and you anticipate selling or refinancing your home...get ready!
Most consumers do not want to get permits because it will increase their property taxes, but what they don't realize, the increased cost is typically MINIMAL...FINES FOR NOT PERMITTING CAN BE ASTRONOMICAL-here is an example of a recent experience I had with my Buyers:
I had been working with these Clients for a few weeks, they made a decision to put in an offer on a home that met their needs...but wasn't their dream home! Right before doing the paperwork, I decided to check the MLS one more time...the perfect home had just been reduced $25,000. I called my Clients, we rushed over for a viewing, they fell in love with it, and it turned out to be COMPLETELY UPDATED with all the bells and whistles-they made an offer and within hours we had it under contract...WOW, that was exciting and easy...NOT FOR LONG!
After getting the home under contract and reviewing the tax records, I noticed the records stated: 2,200 square feet, 3 BRs, 2.5 Baths while the MLS stated: 3,100 square feet, 4 BRs and 3.5 Baths..puzzling! The property was a foreclosure flip, therefore, the selling side had no knowledge, but they did COMPLETELY UPDATE the home. I did my own investigating and was able to contact the original Owner-he stated that he added a first floor Master BR, Master Bath and finished the 3rd Level a few years ago...WITHOUT PERMITS! My Clients did not want to purchase a home that was not properly inspected or up to code, they were afraid of safety issues and the integrity of the structure! Since this was now disclosed, the seller had no choice but to have everything properly inspected and up to code.
Remember, the Seller had just reduced the home $25,000 when my Clients were able to get it under contract. Three months and $26,750 (cost to the Seller to have it properly inspected and brought up to code) later, we finally CLOSED!
If refinancing your home, you may think this does not affect you...WRONG! When the Appraiser arrives at your home, he/she will compare it to tax records and if it does not match, you will be asked if any improvements/changes to the home were made and did you get a permit..save yourself and tell the truth! All information can be verified by the Appraiser calling the local inspections office!
Ask yourself this question, the next time you decide to make an addition/remodel to your home, is it worth it NOT to get the proper inspections and permits....I say...YOU CAN'T AFFORD NOT TO!
By: Kay Herring-Stephenson
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