Trying to buy home with unpermitted construction

[newbie7]

Hello. My wife and I are in San Diego, trying to buy a home. We can't afford almost all of them. One REO is available with comps around $400k, asking $210k after 5 drops in 3 months. The house last sold 2 years ago for $390k!

Problem is 5 unpermitted works: a deck, a house extension, garage finishing, coupe/kennel, and a shed. I believe I can demolish the last three on my own, but the first two are beyond my ability to remove any time soon. I think the first two have been there for many years, functionally ok, and are fine by us, but clearly none of it is to code.

Question is, generally speaking, how dangerous is it to buy a house with so many violations? Is it ever the case that the city is just waiting to pounce, once the bank unloads it?

We can't reasonably afford anything beyond the selling price and the minimum fixes required to make the place habitable. We could stretch a little further if absolutely required, but maybe not enough to pay con$truction to demo the extension and rebuild the walls. How big of a risk is this? Is this just insane to even think about? What should I find out?

Thanks.

:new_newbie:

 

[NC Old Guy]

I would go talk with the local code enforcement people. Find out from them what they might require. Sometimes they will inspect an "as built" so might require some changes but maybe not to the point where they require you to tear it down. But then, I forgot, you're in Calif where anything can happen. You may want to talk with them in general or in specifics. Unless the code people are total nut jobs, I wouldn't think they'd be waiting for the bank to dump it so they can jump on a local citizen. (But then, I forgot, you're in Calif & you'd know the mindset of your local officials better than those of us all the way across the country.) I would expect they'd rather stick it to the bank since the bank doesn't vote. If you get relevant info, you might even be able to use the info to negotiate with the bank. Good luck.


Good luck.

 

[Randolph Kinney]

Hello. My wife and I are in San Diego, trying to buy a home. We can't afford almost all of them. One REO is available with comps around $400k, asking $210k after 5 drops in 3 months. The house last sold 2 years ago for $390k!

Problem is 5 unpermitted works: a deck, a house extension, garage finishing, coupe/kennel, and a shed. I believe I can demolish the last three on my own, but the first two are beyond my ability to remove any time soon. I think the first two have been there for many years, functionally ok, and are fine by us, but clearly none of it is to code.

Question is, generally speaking, how dangerous is it to buy a house with so many violations? Is it ever the case that the city is just waiting to pounce, once the bank unloads it?

We can't reasonably afford anything beyond the selling price and the minimum fixes required to make the place habitable. We could stretch a little further if absolutely required, but maybe not enough to pay con$truction to demo the extension and rebuild the walls. How big of a risk is this? Is this just insane to even think about? What should I find out?

Thanks.

:new_newbie:

This property is being sold as-is by a bank. There is no implied warranty and no disclosure is required. You are buying a property that needs fixing. You would be well advised to get a competent home inspection to understand health and safety issues.

The most serious problem is the "house extension". This can cause you major problems. The Realtor in the confidential remarks section is warning of "illegal and non conforming modifications and additions".

This is over your head. I would not attempt such a purchase.

 

[icisic7]

I'm not speaking as an appraiser here, just a long-time San Diego county resident. I've seen many non-permitted additions, and have never heard of the city or county making anyone tear them down. (Someone is sure to jump in here and say they have.) In fact, when I bought my house, the Realtor disclosed that the laundry room in the garage wasn't permitted. No big deal... however, if you think safety is an issue, then proceed accordingly.

I would guess if the neighbors haven't complained, then it's all under the city's radar. I don't think they drive around neighborhoods looking for violations.

Good luck with your purchase!

 

[hastalavista]

While I respect Cindy's opinion, I'll offer a contrary one:

I am aware of jurisdictions going to owners and having them "fix" the problem- one jurisdiction is requiring a modification that is so significant, it is cheaper to demo than modify.
The jurisdictions I know of are in Northern California. My point is that although it is not typical, and may be unheard of, it is certainly possible.

I would go talk with the local code enforcement people. Find out from them what they might require. Sometimes they will inspect an "as built" so might require some changes but maybe not to the point where they require you to tear it down.

I agree with Leon.
Also (and I would definitely take Cindy's opinion on this over mine) I suspect this isn't going to be the last of the under $250k foreclosures.

Good luck!

 

[Walter Kirk]

Make your offer to purchase conditional on approval by the building dept. If it can't be easily straightened out you won't ;oose anything but time.

Several years ago the building inspector demanded to see the blueprints for a build that we just bought. We told him that we didn't have them or even know if there were any. The building inspector said OK and we never heard from him again

 

[newbie7]

More info.

Yes, the constructions are nonconforming, house sold "as-is" by the bank. It's very hard to imagine anything less than a total tear-down would be required for the house addition, if pressed. I don't think safety is any risk, but it's clear even to a laymen like me that the house addition is very much nonconforming.

The lot is big, and the potential is absolutely beautiful. But it will take us years to do (afford) all the remodeling needed.

We talked to a neighbor. She said there was a lot of police activity as the house was used for a lot of illegal activities in last two years. She was very zealous in helping the police, and knew full well about the illegal constructions that were long-extent. No indication if the house is "flagged" in any way.

No doubt this whole market is over our head. Median home prices are around $560k, and this is one of a handful of houses that we could afford to buy (though not necessary be able to keep). We'd like not to have to leave San Diego.

The bank is selling for roughly HALF the sale price from 2 years ago. How could it appraise so low, when most of the illegal construction was already there 2 year ago? Nothing is falling apart, except the deck needs some rehab.

Thank you for your opinions. Please keep them coming.

:new_newbie:

 

[CJHNV]

Maybe you make the bank/seller spring for the deluxe title insurance policy that covers non-permitted stuff!

 

[Randolph Kinney]

Yes, the constructions are nonconforming, house sold "as-is" by the bank. It's very hard to imagine anything less than a total tear-down would be required for the house addition, if pressed. I don't think safety is any risk, but it's clear even to a laymen like me that the house addition is very much nonconforming.

The lot is big, and the potential is absolutely beautiful. But it will take us years to do (afford) all the remodeling needed.

We talked to a neighbor. She said there was a lot of police activity as the house was used for a lot of illegal activities in last two years. She was very zealous in helping the police, and knew full well about the illegal constructions that were long-extent. No indication if the house is "flagged" in any way.

No doubt this whole market is over our head. Median home prices are around $560k, and this is one of a handful of houses that we could afford to buy (though not necessary be able to keep). We'd like not to have to leave San Diego.

The bank is selling for roughly HALF the sale price from 2 years ago. How could it appraise so low, when most of the illegal construction was already there 2 year ago? Nothing is falling apart, except the deck needs some rehab.

Thank you for your opinions. Please keep them coming.

:new_newbie:

I have looked at the previous listing on the property you are interested in.

2 BEDROOMS ADDED BY PREVIOUS OWNER W/O PERMITS ONE WITH INDOOR JACUZZI & SHOWER, DETACHED GARAGE CONVERTED TO STUDIO W/O PERMITS

Again, you have a very problematic situation concerning health and safety with 2 bedrooms added with plumbing and electrical. The previous Realtor estimated that the home had 1200 SF GLA with these additions, called it 2 bedrooms and 2 baths with 2 optional bedrooms. You can see that a stove has been added also as the stove pipe sticks above the roof line.

The county record says this home has 876 SF, 2 bedroom and 1 bath.

I don't suppose the city or county is waiting for you to buy so they can now come after you for previous violations. However, I wonder if your lender would loan on such a property if they understood to what extent the original property and structure was modified, adding plumbing, adding electrical, changing walls and altering the roof line? All done with out permits?

The question becomes marketability of such a property. It was put on market for $280,000 on 6/18/2007. They have dropped the price 4 times down to $209,000 offering $6,000 closing cost and a $3,000 bonus to the buyer's agent.

What worries me the most is the electrical. I am attaching a MLS photograph of the side of the house showing the power meter and wiring attached around it that goes into the house. Is that wiring normal?

 

[Tim The Enchanter]

Sounds like a "contractors special". It must be getting down near land value.