Jermaine Dup…, Home Seller in South Ozone Park, NY

Can I sell my house with building violations?

Asked by Jermaine Duprey, South Ozone Park, NY Fri Dec 17, 2010

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You can allocate an a negotiated amount in an escrow account for the buyer to use towards repairing violations. Defaulted violations may have their penalty negotiated, but if you went to the hearing and were found in violation, penalties should be added to the escrow. The good news is, the buyer can attempt to waive some penalties as a bonnafide purchaser. I know this all sounds like legal mumbo-jumbo, but if you really want help, it's best to go to Building Violation LLC at BuildingViolation.com and get your building violation resolved before the closing. By the way, they can give you an estimate write-up for the escrow.
0 votes Thank Flag Link Wed Aug 19, 2015
No one will lend on your home with the violations you mentioned. If you bought your home with some of these violations, then call the title company you used. The title company must certify that the home is free of violations for a lender to close on it.
Why did you think you could add an extension without prior approval? You will have to make the changes since 203K mortgage do not pay for changes to be taken down if they do not increase the value of the home.
0 votes Thank Flag Link Thu Dec 27, 2012
If you added on to a home with building violations ODDS ARE NO. Lender won't approve the loan, AND possible that city will not allow home have clear title till all is resolved.

Best contact city resolve those issues

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
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0 votes Thank Flag Link Mon Dec 20, 2010
You mentioned below, "They want us to return the house to how it was built in 1925," is the property considered a landmark....have you considered hiring an expediter, they deal with such problems on a regular basis......
0 votes Thank Flag Link Sun Dec 19, 2010
Hi Jermaine
I'm sorry to have to add to your problems but I think it's time for some tough love.
The problem is not with the building department. Building department inspectors do not create the building codes they just enforce them. The codes are designed to provide a standard method of construction with the objective of creating a safe building. We are all aware of the nightmarish stories of contractors(building, plumbing, electrical, etc.) coming in and doing substandard work which create safety issues. Following a process of getting a permit, having inspections and getting a final certificate of occupancy at the very least provides a measure of security that the job has been done correctly(to code) and that the likelihood of a dangerous condition existing is diminished.
Many homeowners believe that by circumventing these safeguards they can save on taxes, avoid the additional cost of getting permits and hire contractors that are willing to work at a steep discount. To that I say "penny wise and pound foolish". You and prior owners of the property seem to have followed this ideology and now you want to blame it on the building department inspectors who are just doing their job.
But, Jermaine, they are not your only problem. The banks and FHA/HUD are also unwilling to take on this risk and that is one of the reasons that appraisers are hired. As a certified residential appraiser my job is not only to determine the value of the property, I am also the eyes and ears of the lender when I come in to inspect your property. If I come into your home and notice that there is an extension which does not appear in the city records I will question you about it. If I determine that your house is valued properly for the mortgage but you don't have a certificate of occupancy for the extension or other work that seems improper or illegal( such as a basement apartment) I will complete my report but make the closing subject to a Certificate of Occupancy or correction of any improper work.
If you purchased your home with obvious illegal features but these features were what you were looking for you should have at least been told by your home inspector that there were obvious violations, and/or the appraisal should have alerted the bank to obvious(appraisers are not home inspectors) irregularities, and/or your attorney should have questioned and advised you of the risks associated with buying buildings that do not have all their certificates in order. At this point in time it is too late to say that the problem is because of the building department. You and prior owners have created the problem and you must now correct it and not pass it on to the next buyer.
However, if you find someone who is willing to buy the property and make the improvements(which must be done before a mortgage will be approved), then that person can apply for an FHA 203K mortgage which will include the amount of the financing for the purchase and the cost of construction for making the repairs. The house will still have to appraise for the financing, construction and any concessions that may be included. If this cannot be done then you will either have to lower your price or do the work yourself. Good luck Jermaine.
Allen Bauman
Century21 Yve R.E.
Licensed R.E. Agent
NYS Certified Residential Appraiser
516-791-3846
allen.bauman@gmail.com
0 votes Thank Flag Link Sun Dec 19, 2010
Hi Jermaine, are you using an expeditor? How old is the porch?? and how far are you from a corner?? email me therese.korahais@elliman.com
0 votes Thank Flag Link Sun Dec 19, 2010
The advice I've been getting from most people is to fix the problem and then put the house on the market. Unfortunately it's not that simple. A couple of years ago we extended our kitchen without a permit. We have hired an architect and the NYC DOB has not approved any prints inorder for us to resolve the situation, not only do they have an issue with the extension but with the entire house. They want us to return the house to how it was built in 1925, remove the enclosed porch, take out the fencing around the house and break down our front porch. Which would make the house unsellable. The irony is that a lot of houses in the neighborhood have the same changes made to them as mine, the only difference is that they never got tangled up with the NYC DOB. Does any one personally have any advice on the NYC DOB? Seems like once you let them in your opening a can of worms. Would really appreciate any first hand advice with dealing with them. I really appreciate the feed back so far! Thank You!
0 votes Thank Flag Link Sat Dec 18, 2010
Jermaine I had clients that purchased a home with 9 violations on it 2 years ago. Because of the violations they had to use a 203k loan to purchase the property. After the viololations were cleared up they refinanced out of the 203k into a conventional loan. Their purchase money and cost of repairs came to 202,000.00, the property appraised at 585,000.00 when refinancing into a conventional loan.

The moral of the story is fix it and sell near market or discount the heck out of it because it takes a special person to purchase a property knowing that they will have to deal with the local government before they buy the house.
0 votes Thank Flag Link Sat Dec 18, 2010
Consider doing what needs to be done in order to rid any violations--some lenders will not lend with violations, and any cash offers may come in lower than property value--what is your agent and or attorney suggesting....
0 votes Thank Flag Link Fri Dec 17, 2010
Jermaine
The answer is yes and no. If you accept Robin's scenario that the buyer is deaf and blind and either has no attorney or a deaf and blind attorney who forgets to order a title and lien search then the answer may be yes. However under usual circumstances and if a mortgage is involved then the answer is no. Your attorney will help you determine the best way to cure the problem.
If you are to receive proceeds from the sale then an amount might be able to be held in escrow to pay for curing the violation. However it is best that you try and get the violation removed prior to the sale if you are able to do so. Speak to your attorney!
Allen Bauman
Century21 Yve R.E.
Licensed R.E. Agent.
NYS Certified Residential Appraiser.
516-791-3846
allen.bauman@gmail.com
0 votes Thank Flag Link Fri Dec 17, 2010
Robin's answer is great - in reality, you will need to discount for the “issues” and then fully disclose everything. In reality, you would be better off if you could correct the issues before selling.

Here are a few posts that may be helpful:

3 Things You MUST Do To Get Your Albatross To Land Successfully…
http://www.trulia.com/blog/carl_medford/2008/12/3_things_you…

The Good, the Bad and the Ugly – 3 CRITICAL Things To Know About Flips
http://www.trulia.com/blog/carl_medford/2010/11/the_good_the…

You TOO Can Purchase A Ticking Time Bomb! One Easy Step!
(Remodeling Without Permits - Part #1)
http://www.trulia.com/blog/carl_medford/2008/12/you_too_can_…

What Might Your Next Home Purchase Have In Common With The Titanic? 7 Key Recommendations
(Remodeling Without Permits - Part #2)
http://www.trulia.com/blog/carl_medford/2008/12/what_might_y…
0 votes Thank Flag Link Fri Dec 17, 2010
Hi Jermaine, If it is a lack of funds-depending on the violations that are outstanding...money can be held in an escrow account to make sure the violations are cleared by the new buyer. Of course there are many different situations- that is only one of them. If you want to talk give me a call Terry K 718-614-3167 cell or email me Therese.Korahais@elliman.com
0 votes Thank Flag Link Fri Dec 17, 2010
If you sell all cash to an investor, you might get one who will take it with the violations. If the person wants a standard FHA loan, then probably not. If they are going to take out a 203k renovation loan, then they could probably do it as long as they get a figure on the cost to cure the violation.
If they are planning on a conventional loan, I am not sure if you will find anyone who will go with one of the out-of-town lenders that does not ask for municipals, and may not pick up the violation. THe next thing, however, is to find a person who is using a lawyer who will not order a title report with a building and violations search, and will allow his client to close that way. What is involved in fixing the violation?
0 votes Thank Flag Link Fri Dec 17, 2010
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