What remodeling or replacing work requires permits and finals?

CAR seller disclosure: Seller Property QuestionairreIn this highly overheated seller’s real estate market in Silicon Valley, I’m suddenly seeing many more houses being sold with extensive remodeling and no permits and finalsnone!

Sellers can get away with this in a hot market, meaning that buyers have limited power to walk away from such a home because the inventory is scarce.  But what happens when things cool down to, say, a balanced market?  Suddenly those houses and condos with massive, non-permitted remodeling may lose a lot of their appeal, and  home sellers needing to move just then may pay the price in what pickier buyers will pony up for it.

Some home owners meekly claim to believe that they only need permits if they expand the original footprint of the house.  That’s just plain wrong, and most likely know better, too.

How can you learn about a home’s remodeling history?

First, then, how do you as a home buyer know the situation with the remodeling? Most of the time, San Jose area home sellers provide upfront disclosures and inspection reports, and the answer may be revealed there.

CAR vs PRDS paperwork

We have 2 sets of contracts, disclosure forms, etc. in use here: the Peninsula Regional Data Service, or PRDS, and the California Association of Realtors, or CAR.  Here’s one place where the PRDS forms are far better than the CAR forms.  The CAR seller disclosure, the Seller Property Questionairre, simply asks if the seller is aware of any alterations, modifications, remodeling, replacements or material repairs on the property.  Many sellers are not careful and just mark “no” to every answer, but this is an extremely important question! So buyers, ask yourselves, does everything in this home look unaltered from the time it was built?  Probably not.

The PRDS Supplemental Seller’s Checklist asked for detailed information on what was done, when, and whether permits and finals were obtained.  The first set of questions is for the time the current seller has owned the property, but then it’s asked again regarding prior ownership.  This is so much more thorough!

 

PRDS SCC alterations and permits

 

Many municipalities (towns, cities, counties) have online permit history.  It may not always be accurate, which I why I strongly advise home owners to keep a copy of everything, but more often than not it is correct – so it’s a good place for consumers to check.  In San Jose it’s a breeze with SJPermits.org.  These are things which buyers and sellers investigate, not real estate agents (nor do real estate licensees check the Megan’s Law Database, but consumers should). (more…)