The owner converted the garage to a master bedroom without permit. How much should this affect my offer?

Asked by Dave, Sunnyvale, CA Thu Jul 3, 2008

I'm thinking of putting in an offer on a foreclosure where the owner converted the garage to a bedroom complete with bathroom & shower. Assuming they did it to code, what kind of costs should I expect to get it permitted? Is the bank responsible for the permit?

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7
Bill Eckler, Agent, Venice, FL
Sat Jul 12, 2008
Dave,

Regardless of what the code department position would be, we feel this is an excellent opportunity to adjust your offer accordingly.

Since there could be extensive changes, if you were required to return it to its original condition or modify it to meet existing code, we recommend you adjust your offer by decreasing it by the amount it would cost you to return it to the original condition.

Good luck,
The "Eckler Team"
0 votes
Sanjoseselle…, Home Seller, San Jose, CA
Sat Jul 12, 2008
Dave,
I actually talked to someone at the Sunnyvale planning department. As I mentioned you are required to have covered parking. It depends on some details if you are required to have a single or two car garage. Here's the link to the regulations.
0 votes
Sanjoseselle…, Home Seller, San Jose, CA
Fri Jul 4, 2008
It if was built without a permit then it's more than 90% likely NOT to be up to code. Besides, you can't convert a garage to living space in Sunnyvale if it's detached or if you are not still providing a covered parking space. You better go to Sunnyvale City Hall and discuss the building code issues with the building department. As soon as you purchase that property, it becomes your responsibility. I also recommend that since this is an "as-is" sale you should hire some inspectors. Everything you find that needs to be repaired, you need to consider in your offer price.
0 votes
Patrick John…, Agent, Cupertino, CA
Thu Jul 3, 2008
Hi Dave,

Considering the circumstances you should not offer any more than a comp in the neighborhood that has not had the conversion done. You may well have to pull out the conversion on your dime after the fact. Banks will not assume the responsibility, liability, and the pandora's box of issues to bring the property to code. The bank will require an As-Is addendum. The City of San Jose has a permit search site, or you can go downtown for a nominal fee and get copies of any permits on file. If you are looking for an agent, feel free to contact me to check comps, and to view other listings that may be a comparable or better value without the headache. I am very familiar with the Berryessa and North Valley. You should have professional inspection completed to verify the quality of construction.

Patrick
(408) 410-9139
http://www.dreamsbytheyard.com
0 votes
L, Home Buyer, Minnesota
Thu Jul 3, 2008
You better check with the code enforcement officer in the area since they can literally make you tear down something that was not done with a permit. Work being done without a permit means it was not inspected and it may not be up to building code and could in fact be dangerous! Here they can also make the owner pull a permit (after the fact), pay a fine and if it doesn't pass make you tear it down. You would be better off doing this before making the offer so you know what you are getting into because once you buy it and sign off as is you will be the one responsible for the code violations.

Some cities are now making owners bring properties up to code ahead of time because of this terrible foreclosure mess you should check to see if your city is one of them.
0 votes
Bill Mccord, Agent, San Jose, CA
Thu Jul 3, 2008
Dave,
First thing to understand is that the Bank will be selling the property as is and will do nothing about a missing permit. You need to go down to the records office for the City you are buying in and they will let you do a Permit Search for a small fee. If it has permits and was signed off as complete then the improvement effectively gives you additional sq footage and the value of a 2nd master suite but removes the value of the garage. An appraisal would show that as an addition to value.
If not permitted the appraisor will remove the value of the garage and give little for the improvement. You would be wise to have it professionally inspected before buying. Another possible gotcha on this would be that many lenders in todays world will have problems with this situation and may not lend on it.
0 votes
Laarni G. Om…, , Orange County, CA
Thu Jul 3, 2008
Hi Dave,
The first thing that the bank will make you be aware of is that, the property is being sold as is. Please use a Real Estate agent as foreclose properties have very limited disclosures in particular but tons of disclosures in general. Your first question to your agent will be what is the square footage per title report and that will be the basis of your offer. I hope that this work out for you.
Happy 4th,
Laarni
0 votes
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