I am about to close on a house that I’m buying, and my realtor called today to mention the seller’s agent once told her the basement was finished by the seller’s father and not by a professional. She thinks it’s built without a permit, but the seller didn’t disclose it. My realtor tried looking up permits and couldn’t find any. We could ask the seller to get the permit retroactively, but that could delay closing. I’m selling my current home and buying this one on the same day next week. I’m panicking because I’ve already set up moving, and the buyer of my current home is moving in the same day. I won’t have a place to stay if pulling permits delays closing.
We had an inspection and appraisal, but no one mentioned anything about unpermitted work. My lender has approved the mortgage. At what point are permits checked? What should I do now?
You’re too far along in the process for this to be an easy fix. That’s why you have the inspection period. Did the inspector notice any defects? How’s the quality of the work? I know some non-professionals who do better work than many contractors. If the basement looks well done, I wouldn’t worry too much.
@Lyle
Exactly, especially if the home is in a rural area. Around here, permits are almost optional. You could hold up the sale and pay more in taxes later for the same result.
@Lyle
Yep, rural homes are often finished without permits. In my suburban area, you need permits for almost everything, but buyers only care about permits for major structural or electrical work, not cosmetic things like finishing a basement.
If the inspection didn’t find issues and your area doesn’t require a final inspection before occupancy, I’d go ahead with the sale. If you ask for a retroactive permit, it could delay closing, and your property taxes may go up once the basement is officially finished.
Make sure you’re not paying for unpermitted square footage. The listed square footage of the house should match what the city shows. If it’s unpermitted, it won’t count towards the official square footage.
@Gray
Good point. The seller bought the house as a new build with an unfinished basement, and they finished it themselves later. I’ll double-check the square footage.
@Gray
Ask your realtor to check the official square footage to make sure you’re not overpaying for the extra space that isn’t counted in the government records.
Gray said: @Gray
Ask your realtor to check the official square footage to make sure you’re not overpaying for the extra space that isn’t counted in the government records.
Homes aren’t usually sold by the square footage directly.
Don’t close without resolving this. Unpermitted work can cause problems when you go to sell the house later. Better to delay and get the permit, or walk away if the seller refuses.
Leander said:
Don’t close without resolving this. Unpermitted work can cause problems when you go to sell the house later. Better to delay and get the permit, or walk away if the seller refuses.
Getting a retroactive permit will be a hassle. The basement may need to be opened up for inspections, and that could delay closing by weeks, maybe months. Plus, your seller might refuse, and you’d lose your earnest money.
Your work is probably great.