I would absolutely not buy a house where significant electrical and plumbing work was done by non-licensed professionals. I would also not buy a house where any additions, decks, hot tubs, basement finish, attic finish, was not done with permits. YOU are responsible if you buy the house and the town later re-assesses and finds a lot of improvements for which permits were never issued. Your property taxes could take a huge jump if a lot of work was done without a permit. Or even worse, if the improvements result in a zoning violation, you could be responsible to remove the addition/improvement and/or pay huge fines.
And even if the electrical work was done by a professional, you definitely want it to have been done with permits. All electrical work should be seen by 2 sets of professional eyes, the electrician and the building inspector.
To summarize: electrical and plumbing work done by amateurs = DO NOT BUY.
How old is this home that you're buying? Does the home look like there was a recent renovation or has it been there for many years. A leaky faucet and non grounded receptacles aren't a big deal. If the home inspector felt that the house was in poor shape, I wouldn't buy it. But from what it sounds FIRST I would go to the building department in the town the home is in and check the history or permits taken out.
SECOND I would contact a electrician and plumber to go to the house and take a look at the systems. ONLY THEY WILL BE ABLE TO TELL YOU IF IT WAS DONE BY AN AMATEUR or PROFESSIONAL!!!!!!!!!!!!!!!!!!
You always need a permit for things you do to the house. NO you do not have to be a professional to do the work if YOU'RE THE OWNER. OWNERS are the only people exempt from being a licensed "------" in order to take out a permit and have the town come in and say everything is good. Trust me the town inspector will look over the work very carefully when it's done by the owner.
Good luck Wayne, just remember there is NO SUCH thing as the perfect home. They all have problems!
Deciding to buy a home with issues has less to do with the issues themselves and more to do with the net cost implication. Most problems can be repaired/corrected so it's just a matter of factoring those costs when negotiating the sales price. After all, all homes have problems and it's better to know what they are and fix them then not to find them. Feel free to contact me for more information.
Mid Jersey Inspections
NJ Home Inspection Lic. #076900
Most real estate contracts do have a clause that indicates that any work done on the property was done with proper permits pulled, etc.
The below website for Lebanon should help too.