In the world of real estate, navigating permits can be both a challenge and a critical factor in the success of a transaction.
Drawing from my own experiences, I've encountered firsthand the significant impact that permits, or the lack thereof, can have on the buying and selling process. that highlight the importance of Allow me to share some anecdotes permits in real estate transactions.
Early in my real estate career, I encountered a situation that underscored the importance of understanding permit classifications. I listed a property for Mary in Garden Grove, which featured a beautiful room additional that was a perfect family room. Mary assured me that the 200-squarefoot room was permitted, and based on the quality of the work, I did not question her. To our delight, multiple offers poured in, and the house sold for more than the asking price. However, the appraiser did not include the added square feet in his evaluation of the home. It turned out that, although the room had a permit, it was not classified as living space but rather as a garden room. This discrepancy led to negotiations and ultimately a price adjustment, teaching me a valuable lesson about the nuances of permit classifications. Enclosed patios, sunrooms, garden rooms, and such are technically not considered living space, and the added square footage cannot be included when appraising the property.
In another instance, a property in Huntington Beach with a downstairs bedroom was purportedly permitted fifteen years prior.
However, when I did the research at the City, I discovered that the permit had never been completed, commonly known as “finaled.” I have since discovered that this is a common mistake made by owners. They think they have a final permit because they remember going through the process with their contractor and city inspectors but often don't realize that a final inspection was ever done, thus causing the permit to expire.
It this case, after showing the owner the expired permit, he was able to go to the city, pay a fee to finish the permit, get the city inspector to come out, and ultimately obtained the valuable “final” permit. We then sold the house at an excellent price.
An unpermitted room addition, built years ago was reported by a neighbor. The city came and gave the elderly widow only three months to tear it down. Being on a fixed income, she could not afford to do the work, so she was forced to sell. I put her house on the market and fully disclosed to potential buyers that they would have to tear down the addition. I am glad I was able to still get her a very high price, and she was able to buy a new patio home.
In Conclusion:
or renovations in homes. Although
Throughout my career, I've encountered various scenarios involving unpermitted additions it is allowable to sell a home with unpermitted items, my approach has always been one of full disclosure to potential buyers. By transparently informing buyers of any unpermitted modifications, I empower them to make informed decisions about whether to proceed with the purchase.
If you do any renovations to your home, especially adding square footage, it behooves you to hire licensed professionals who obtain permits and show you the final permit, signed off by the City. The lack of permits can impact the value of your home.
Common home improvements that require permits include the following: roof replacements, pool/spa installation, pool fill-in, HVAC, water heaters, relocation and/or addition of plumbing and electrical, wall removal, patio covers, and some window and door replacements. More information can be found at your city planning department.