Non-permitted Addition in California

[Logan Vierstra]

I got a friend trying to sell a house in El Dorado county that he has built a rather large addition onto. He has none of the addition permitted. Hes told me that when he bought it, it was roughly 1000 sq ft, and that he's added about 1400. When I've researched the property it says that it's 1800 square feet on Realtor and property radar, and 2400 on Zillow. So I figure in reality he has somewhere between 600-1400 sq ft non-permitted addition. It's still a long way from finished, but his plan is to keep working on it till he gets it nice enough to sell to a cash buyer that doesn't care about it being permitted. I told him I believe he's hoping to find a unicorn. He's under the impression that he can get 400-450k on it considering that comps to his property are selling in the 600-700 range(2400 sq ft permitted, and in ARV condition). Comps on his property ,assuming that 1600 sq ft are permitted, are falling closer to the 400 range. I think he's more likely to get 250 for it.

My questions are:

• Can he even sell the property without tearing down the addition?
• if so, what could he realistically expect to get?

[Sean OToole]

I've probably purchased and sold a dozen houses with un-permitted additions over the years. All of the sales have been with full disclosure. Not so with the purchases, but that is part of buying trustee sales.

You were quite savvy to note the difference between public records and the listed, or owner claimed, sq ft. That is certainly the best tell tail sign of un-permitted work. One of my check list items before buying at trustee sale is to compare past listings (if any) to public records to look for exactly that.

Regardless he can definitely sell it, and should absolutely disclose it so that he doesn't have to worry about future liability.

As for how it will impact value, it really comes down to the quality of the work, and the value it adds to the property. If it was all done to code there's even the possibility of getting it permitted after the fact. If the work is really shoddy, it may be best to tear it down.

I've had properties with un-permitted work that have sold at or above market, especially if the un-permitted work was unique, added real value to the home, and wouldn't be approved otherwise (un-permitted space converted into a cool loft or wine room for example). And I've had ones that I've sold at deep discounts because the only fix was to tear it down and decided to wholesale it instead.

Hope that helps.