Unpermitted Dwelling...yay or nay?

[Kevin Phu]

So I was driving around a neighborhood of interest today when I happened to see signs for an open house of a property that I was interested in. Turns out the open house was last minute as the buyer backed out of the accepted offer yesterday. Agent says they don't know exact reason why. Agent at open house isn't the seller's actual agent I believe so couldn't get too many details out of him. 

In the backyard there is a unpermitted unit. I would estimate about 400 sq ft. Has a full bath and kitchen counter/hook ups. 

What are some things I should consider with things like this? Previous owner had rented that unit out before. Current owner just uses it for storage.