Buying a new home is a major investment, and you want to ensure that you’re getting the best value for your money. However, what happens when you find your dream home with beautiful renovations, only to discover that they were done without proper work permits? While it may be tempting to overlook this issue and move forward with the purchase, here are a few things to consider before making your final decision.
Impact on appraisal value
An appraiser takes into account the square footage of a home when determining its value. However, if any renovations were done without proper permits, they may not be included in the total square footage. For example, if a 10×10 room was added without a permit, that means 100 square feet of the total square footage of the house will not be counted. This can result in a lower appraised value, which can have a negative impact on your ability to secure a mortgage loan.
Lack of insurance coverage
Contractors may not always adhere to the latest safety codes when performing renovations. If any damage occurs due to faulty work in an un-permitted space, your homeowner’s insurance policy may not cover the costs of repairs. This can result in additional expenses that you’ll have to pay out of pocket.
Obtaining a permit after the fact
In some cases, a seller may be able to obtain a permit after the fact, but this isn’t always possible. If the contractor who performed the work is no longer in business, the seller would need to hire an architect to create plans and have them reviewed by the municipality in charge of issuing the permit. This process can be time-consuming and costly, and there’s no guarantee that a permit will be granted.
City intervention
Depending on where the home is located, city codes may require specific inspections, particularly on framing. If a city inspector finds that framing is not up to code, you may be forced to tear down drywall for proper framing inspection, which can result in additional repair and material costs.
Final thoughts
Buying a home remodeled without proper work permits can lead to a lot of hassle and unexpected expenses. While it may be tempting to overlook this issue in favor of a beautiful home, it’s important to carefully consider the long-term implications of such a purchase. Make sure you love the home enough to invest the time and money needed to address any unpermitted renovations before committing to the sale.
