Is there a violation recorded for the "room" conversion?
If there is no violation it would be prudent for the current owner to restore it to the pre-existing condition, before putting the property on the market..
If there is a violation of record, then yes the work will need to be filed to correct the violation/condition, and again should probably be done before putting the property on the market.
Depending on the condition of the rest of the property and so long as this extra "room" is not actually an extra apartment and it will be delivered vacant at closing, many banks will hold an escrow to ensure that the condition gets corrected in short order, especially if the garage conversion is really just a workshop/hobby room conversion.
Kathryn Lilly, Broker
Realty on the Greene, LLC