What Is Unpermitted Work and How Does It Affect Home Sales?

Introduction

If you’re someone searching for “What is unpermitted work and how does it affect home sales?” you are likely in the middle of a frustrating and stressful situation. You may have recently discovered that some part of your home renovation or improvement was done without the proper permits. Whether you’re considering selling your house or you’re in the process of doing so, this can lead to confusion and uncertainty. You likely have several concerns: How will this affect your ability to sell the house? Can you still get a good price for it? What kind of complications might arise during the sale? And, if you’re wondering whether to sell your house for cash to a real estate investor like us, you may be wondering how unpermitted work affects that decision too. In this blog, we will break down what unpermitted work is, how it can impact home sales, and explore the potential risks involved. By the end, you’ll have a better understanding of what your options are, and why sometimes, the easiest route is selling directly for cash.

What Is Unpermitted Work?

Unpermitted work refers to renovations, additions, or alterations to a home that were done without obtaining the necessary permits from local authorities. Most jurisdictions require that homeowners or contractors apply for permits before undertaking certain types of work, especially major renovations like adding new rooms, finishing basements, or updating electrical and plumbing systems. The primary purpose of this system is to ensure that work is done safely and up to code, protecting both the property and the people living in it.

When it comes to selling your house, unpermitted work can present a significant obstacle. If buyers discover that you’ve made improvements to the property without the proper permits, it could raise a red flag about the quality and safety of the work. They may question whether the work was completed to code and whether it meets legal standards, especially if it involves key areas like electrical systems or plumbing. Even if the work was done well, the lack of permits can affect the perceived value of the home and complicate the sale process.

For more details on why permits are required for construction, check out this Building Permit Guide from this guide.

How Does Unpermitted Work Affect Home Sales?

The presence of unpermitted work can affect home sales in several ways. The most common issues sellers encounter are:

1. Lower Market Value
   Homes with unpermitted work can often sell for less than homes with properly permitted renovations. Many buyers are cautious about purchasing a property that may have code violations or unsafe construction, especially if it could lead to costly repairs or legal trouble down the line. In some cases, appraisers may reduce the value of your home based on the unpermitted work, which can also affect your ability to secure a fair sale price.
2. Difficulty Securing Financing
   If a buyer plans to finance the purchase of your home, unpermitted work can complicate the loan approval process. Lenders often require that the home meets specific safety and structural standards. If your property has unpermitted work, the lender may not approve the loan unless the work is properly documented and approved. In some cases, the buyer might even have to pay for inspections and legal fees to get the necessary approvals for the unpermitted work.
3. Inspections and Repairs
   During the inspection process, a home inspector will likely discover any unpermitted work. This could lead to delays in the sale or negotiations for the price to be reduced to cover the costs of rectifying the issue. Even if the unpermitted work seems minor, the buyer might still request that it be fixed before closing, or they may choose to back out of the deal altogether.

If you’re interested in understanding more about home inspections and the process, Investopedia provides a helpful guide.

4. Legal Liabilities and Risks
   Unpermitted work poses a legal risk for both the seller and the buyer. If a buyer discovers unpermitted work, they may want to hold the seller accountable for any issues or repairs that arise after the sale. This could lead to costly lawsuits or disputes. Additionally, local authorities may require that the unpermitted work be undone or that you apply for retroactive permits, which can be time-consuming and expensive.

Can Unpermitted Work Be Corrected?

If you’re looking to sell your house but have unpermitted work, you might be wondering if it’s possible to fix the issue. The answer is yes, but it depends on the nature and extent of the work that was done.

1. Getting Permits After the Fact
It is possible to apply for permits retroactively in some jurisdictions. This involves submitting plans and documentation to the local authorities and having inspectors approve the work. However, the process can be lengthy and costly, and not all unpermitted work is eligible for retroactive permitting. If the work doesn’t meet current building codes, you might be required to tear it out and redo it, which can become expensive.

2. Bringing the Work Up to Code
In some cases, bringing the work up to code might be simpler than going through the retroactive permitting process. For instance, if the electrical system was improperly installed, you might need to hire a licensed contractor to bring the work up to code and pass an inspection. This could cost several thousand dollars, depending on the scope of the work. However, if the work is substantial and involves structural elements like foundations or roofing, it could be more difficult and expensive to fix.

3. Disclosure and Negotiation
Even if the unpermitted work cannot be fully resolved before selling, you can still disclose the issue to potential buyers. Transparency can help mitigate the risks of a failed sale. Be prepared to negotiate with the buyer, either by reducing the sale price or offering to fix the issues before closing. In some cases, you may also want to consider offering the buyer a credit toward the cost of correcting the unpermitted work.

As part of your disclosure and preparation to sell, it’s important to understand how unpermitted work affects home sales. To learn more about your options when dealing with unpermitted work in Tennessee, check out our page on How to Sell a House With Unpermitted Work in Tennessee for comprehensive advice and next steps.

How Can Selling for Cash Help?

When it comes to selling your home with unpermitted work, one option that may be worth considering is selling to a cash buyer, such as a real estate investor. There are several reasons why this may be the best route:

1. Fast, Hassle-Free Sale
One of the biggest advantages of selling to a cash buyer is the speed and simplicity of the transaction. Unlike traditional home sales, which can involve long negotiations, inspections, and approvals, a cash sale can close quickly, often within a matter of days. This is especially beneficial if you’re facing financial strain or want to avoid the hassle of dealing with unpermitted work issues.

2. No Need for Repairs or Permits
Cash buyers often purchase homes as-is, meaning you don’t have to worry about fixing unpermitted work, obtaining permits, or paying for expensive repairs. As a seller, this can save you time, money, and stress. Since cash buyers typically purchase homes with the intent to renovate or resell them, they’re more likely to overlook unpermitted work, especially if it doesn’t pose a safety risk.

3. Avoid Delays and Buyer Financing Issues
Traditional buyers may back out of the deal if they encounter unpermitted work, or they may require that you lower the price to compensate for the cost of correcting the issue. With a cash sale, you avoid these complications, and the process remains straightforward. You can move forward with the sale without worrying about whether the buyer’s financing will fall through.

4. Sell As-Is Without Losing Value
In many cases, cash buyers are willing to pay a fair price for homes with unpermitted work. While the offer may be lower than what you could expect from a traditional sale, it may still be a better option than investing money in getting permits, doing repairs, and waiting for the right buyer.

Final Thoughts: Why Selling to East Tennessee Home Buyers LLC Might Be the Best Option

Dealing with unpermitted work can be stressful, and trying to sell a house with unpermitted work can complicate an already challenging process. While you may be tempted to invest time and money in fixing the issue, this can take months and significant financial resources—resources that may be better spent elsewhere. Selling to a cash buyer, particularly an experienced real estate investor like East Tennessee Home Buyers LLC, could be the best way to get out from under the burden of unpermitted work and move on with your life.

By working with East Tennessee Home Buyers LLC, you can sell your house fast, avoid costly repairs, and eliminate the risk of potential legal complications. We specialize in buying homes as-is, no matter the condition, and that includes properties with unpermitted work. With us, you can bypass the long, stressful process of traditional sales, skip the inspections, and close quickly—often within just a few days.

If you’re ready to sell your house without the hassle of dealing with unpermitted work or any other complications, East Tennessee Home Buyers LLC is here to help. We offer fair cash offers and a smooth, stress-free process to get you the best deal without the added burden. Contact us today to see how we can help you move forward.