Buying REO with unpermitted room?

[Chris Ferren]

What are your thoughts? Is this a huge factor when selling a rehabbed home? Do a lot of buyers turn away? How bad does it affect your end profit? There is one house listed on the MLS that looks like it is in pre-auction status. I understand you can get big discounts right before a house goes to auction as the bank will take big discounts at that point. This house has been on the MLS for 150 days and in pre-auction, but one of the rooms is unpermitted? Is that a deal killer, or something to be concerned about? Also, anyone else pick up real good deals with pre-auction bids?

Thanks for all the help and advise everyone!!

Chris