Permits: Are They Worth the Seller’s Time?

Yesterday we posted about the importance of permits to buyers. As a follow up, today is all about the seller.

The biggest question when it comes to the fickle relationship between sellers and permits is: Is it worth it? Let’s say hypothetically your home is a 3 bedroom/2 bathroom and 2000 square feet. You want to add an additional 150 square feet for another bedroom. Should you get a permit for this construction?

The answer is not really black and white. In truth, it’s possible to get away without getting a permit for your addition. If you don’t report it to the county, they don’t necessarily have the means to find out… right away anyways. Moreover, if you’re looking to sell your home there are buyers out there that won’t care if the extra space is unpermitted. 

Having unpermitted additions makes it incredibly difficult to sell your home because most buyers do not want to take on that risk. Lacking permits also decreases the actual value of your home as well. Appraisers will not include that extra 150 square feet because technically, it “doesn’t exist”. Thus, on the off chance a potential buyer is interested, they definitely will not be willing to pay the amount the house is actually worth. And as a seller, you are required by law to disclose all information regarding permits. One tip all Real Estate Agents recommend: when it comes to selling your house, disclose everything. It will only make your life easier down the road.

Furthermore, it’s just not worth the legal issues that are sure to happen. Even if you manage to sell your home without getting those permits and you disclosed this information to the buyers, you could very well end up having to pay for the permits. (Plus back taxes, fines, and penalty fees.) It’s essentially a lose-lose situation.

So, in order to avoid any problems in the future, what do you need to do when it comes to obtaining the necessary permits? There are two different situations where you’ll need to do it:

1. You bought your home many years ago from the previous owners and are now looking to sell. The only issue is that you’re unsure if there are any unpermitted additions. What do you do?

– Check the blueprints. These should be a representation of the house as it was originally constructed. Screen Shot 2014-06-05 at 11.59.57 AM
– If you don’t have the blueprints, you can always try contacting the previous owners. However, in this hypothetical, you bought the house many years ago and Mr. and Mrs. Jones might have changed their number. Therefore, you can contact the original construction company or check the county records. These can usually be found online. If you’re in San Mateo, you can check out this website for further inquiries.

2. The second scenario is that you’re looking to sell but want to add an additional bedroom to increase the value of your home. If you are in San Mateo, you can go here to find out what building permits you need and how much it will cost.

Screen Shot 2014-06-05 at 12.03.15 PM

Any seasoned Real Estate Agent should be able to assist you in more detail and anticipate any possible issues if you have unpermitted additions. If you have any questions or want to discuss this topic further, you can always contact Henry.

Always happy to help!

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