Buying a Home? What to Know about Permits
First-time homebuyers and seasoned buyers alike fall victim to the red tape that is building permits. Learn the importance and everything else you need to know.
House hunting can be exhausting. Finding a home that matches every one of your expectations is nearly impossible. This means you’re possibly considering making alterations to your new home sooner rather than later. Maybe removing a wall here or transforming your garage into a family room. Although it differs by city or county, some projects require permits while others do not. If unsure, you can always contact your permit office for clarification.
But aren’t building permits just bureaucratic red tape aimed at stopping you from doing what you like at your home? Although this is how they are often perceived, the number one goal of building permits is actually safety. Read more about what a building permit does and what to keep in mind if you’re looking to make changes to a home you’re interested in buying.
What is a Building Permit?
A building permit is the county’s, city’s, town’s, or municipality’s way of enforcing building codes to ensure all buildings meet safety standards. Permits have been around much longer than you think, dating back to before the Chicago Fire of 1871 that resulted in new regulations to protect the safety of citizens after the horrendous tragedy.
In addition to enforcing construction standards, building permits are a guide for DIY projects, a way to keep your contractor truthful, and an asset when you’re looking to sell your home.
Building Permit Costs
The cost of permits is different per job and per area but can range anywhere from a couple of hundred dollars to $2,000. The process can be tricky and require monitoring back and forth communication. Because of this, some prefer to have their general contractor obtain permits for them. Be aware this will often come with an upcharge of 15 to 25 percent.
Also, some areas mandate for homes you do not occupy, like in the case of flipping a house, work and permits must be obtained by a licensed contractor.
Lengthy Process: Expect Inspections
After the permit is obtained, and the timeframe varies per permit office, expect holdups while you wait for inspections. While it can seem bothersome, this is one of the most important steps and should never be skipped.
It’s not unusual for more than one inspection to be required. Typically, an inspector will want to see the work in the rough-in stage and then again once the work is completed. They are looking to make sure it meets all local code requirements.
The inspection is usually pretty brief, especially if the inspector is familiar with the contractor doing the work. If the work is being completed yourself, expect the inspection to take a bit longer.
That being said, if the work doesn’t meet code, you will have the opportunity to correct the problem, and the inspector will return until it is corrected.
Buying a Home Without Permits
So, what happens if you suspect the additions and remodels to your dream house were completed without a permit?
Even if a house without permits isn’t a deal-breaker, there are absolutely several factors you should seriously consider before moving forward. The number one issue is many insurance companies won’t accept a claim if the work was done without a permit to ensure it met all proper code requirements. That means if a problem arises, like a flood or a fire, after the unpermitted work was completed, your insurance company won’t cover the damage.
Additionally, you are at risk of thousands of dollars of fines and penalties for failure to obtain a permit. These could cost double or more than what the initial permit would have cost, and you may be charged for every day the situation is not corrected.
You may also struggle to find a mortgage company that will lend to you without a clear title, or you may be asked to rip out or demolish any work completed without a permit.
Selling the home in the future without permits will also be more difficult and will result in a lower sale price. Often, space that wasn’t remodeled with a permit will not be considered square footage by the appraiser, having a drastic impact on the sale price of your home.
Do Your Research
To be clear, even if you were unaware at the time of sale that permits were not obtained, once you own the home, the burden falls to you as the homeowner. As a buyer, as early as the first walk-through, look for signs that may indicate unsafe DIY work like cracked drywall, unsafe wiring, or an out-of-line foundation footprint.
If you’re still interested in the home, make sure to hire an experienced home inspector. With experience comes the ability to spot problems and ask questions. Inspectors can also research permit history and make sure everything was handled properly.
Last Word: Beyond Code
As cumbersome as building codes and permits are, they are important to the safety of the community. Hiring a professional company that is familiar with dealing with permits and the inspection process in your area will not only make the process less painful but also leave you with the knowledge that everything was done, if not exceeding code.
The local experts at Groundworks work with permit departments and inspectors every day and not only understand the process but will educate you on what to expect. In regions where the regulations are especially tricky, often an entire department is dedicated to organizing and executing permits for customers. Contact us today if you have any questions or would like to schedule an inspection.