This is permitted as long as it does not prejudice the rights of the vendor (Eg. 

Unless the work was done with permits, I wouldn't mention it.  

You laugh, and I know this is from Italy, but a hotel I know very well got broken into, several thousand euros taken, so they started down the line of cameras inside the hotel in the common areas.....until they discovered that there were all sorts of privacy laws in Italy, and official inspections and permits required and so forth.

I've looked at several homes where the permit says it was "reroofed shingles with (28 squares)..." or it will have "(19 squares)".

Fourth, there may be water issues with permits depending on how close the property is to the Pond and density of the development. 

Other approaches might be to check permitted jobs on known flips.  

What type of permits are required? 

To save some money, I was thinking of having the owner-build permit.

If not you can walk away.Here's a specific clause that I have used in a similar situation:------------------------------------------------Commercial Tenant/s Requirement: Buyer shall have thirty (30) days from acceptance ofthis Offer to Purchase to identify one or more qualified retail tenants for the subjectproperty or this offer shall, at Buyer’s option, be null and void, and all earnest moneyreturned to Buyer immediately.A Qualified Retail Tenant is defined as a prospective tenant who (1) has profitablyoperated a similar business to the one proposed for the retail space for at least the past 3years, (2) provides reasonable evidence that he or she can obtain or retain any necessarylicenses or permits for the proposed business, and (3) signs a Letter Of Intent to (i) rentthe ground floor retail space of the property for at least 3 yearsstarting in 2014, (ii) pay rent of at least $20 per square foot per year Triple Net in the firstyear with index-linked increases for the remaining term, and (iii) pay for any constructionor modifications required to operate the proposed business.Seller or Seller’s representative must be present during all showings to prospectivetenants

The house was 700-750k (maybe 650 with a good haggle) for both, 100k for house rehab and landscape, and probably 600k out the door for that piles, permits, and oops factor.