Any risk in buying a house with finished basement without permit -Please advise

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Apparently it is more than just a matter of "home inspection" in this case considerable construction modification were made to the property without pulling appropriate permits and having the work inspected by the appropriate code enforcement authorities - this is something that the seller should be expected to resolve before settlement and the closing on the property at the time of the sale!
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On Fri, 14 Nov 2003 10:40:06 GMT, someone wrote:

Then he will never buy this house. The seller will not agree to those condition, PLUS will hate his guts for turning him in to the city. And after he has to pay thos big fines and compliance costs, he will now want more for the house since the addition is now legal!
(Or, the city makes him tear it out; did the buyer WANT those features? Just shot himself in the foot!)
-v.
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v wrote:

How do you know what the seller will or will not agree to? The seller has put himself in a very bad negotiating position by making unpermitted improvements to his house. Who said anything about turning him into the city?

All based on your incorrect assumption that the city found out.

Might be better than buying a house with shoddy, unsafe modifications.
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On Sat, 15 Nov 2003 04:21:00 GMT, someone wrote:

Have you bought many properties where the Seller agreed to pay for *any* problems that turned up? I have been buying and selling for over 20 years and it just doesn't happen frequently enought to be a realistic suggestion. (I've never seen it happen at all, but in then infinity of the net, am leaving a way out.)
Sure the Buyer can have an inspection. But the Seller is HIGHLY UNLIKELY TO THE POINT OF IT BEING RIDICULOUS TO EVEN WASTE YOUR TIME ASKING, to agree to fix "any" problem found. Buyer can show the Seller the problems and ask, or even get an agreement that (say) the first $1,000 in repairs is covered, but rational sellers will not agree to open ended clauses that encourage the Buyer to try to get a free renovation out of the sale. And if you ask for unreasonable stuff, you are likely to piss off the Seller and get thrown out of the deal and NOT get any concessions.
And don't say how do I know the Seller won't NEGOTIATE, SURE he probably WILL "negotiate", but that is not the same as agreeing to your ridiculous terms. Whatever makes you think he WILL agree? And DON'T say there is no harm in asking, there certainly is, if you knew anything about negotiation.
-v.
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said...

Septic and wells are the main exceptions to that rule. If a septic or well fails inspection the seller has to fix or replace it and will typically not get a penny more on the market for the house. It happened to me. I never understood why the market worked that way because if I'm comparing two similar septic houses, the age of the systems is a big factor for me.
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v wrote:

Yes, I have. If there is a problem that needs to be fixed the seller is going to have to either pay for it, lower the price, or tell the buyer "no deal".

The trouble with this seller is that he did something in violation of local building regs. The buyer in this case has him by the balls.

Are you finished arguing with yourself? I never said he would agree. However, since he's in a pretty difficult situation, the odds are good he would.
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I agree with V. If you turn the seller into the city he will hate you and probably find a way not to sell you the house. But if it's important to you to get everything aboveboard then you will have to take the chance and see what happens. The bank that inspects the house may require the permits anyway. However, they may overlook the basement. It all depends.

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Usually if you pullout the stove and sink the banks' inspector will overlook the basement's lack of permit. I would see what happens.

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What are you talking about?
Houseslave wrote:

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The only party that is concerned with all the permits is the buyer and the buyer's bank. If the bank doesn't ask for the permits then the buyer has to make a deciscion whether or not they care. Many banks will tell you to cover up the stove so they can give the OK for the mortgage.
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On Sat, 15 Nov 2003 18:31:25 GMT, "Houseslave"

Maybe in the rural slum where you have your hovel, but you can't get a C.O. without everything being up to code or grand fathered here!
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On Sat, 15 Nov 2003 15:33:25 GMT, "Houseslave"

What sink and stove?
If you try to sell a house without a sink in my area you would never get a loan and if you tried that without a stove where I came from you would never get a c.o.!
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Basha snipped-for-privacy@yahoo.com (Basha) wrote in message

Risk in what sense?
Certainly there is a risk that the basement does not meet code, but this is probably fixable.
With finished basements there is always a risk that your basement might someday flood, so that's something I would consider and weigh.
There is a risk that your property tax will go up.
There is a risk that you may overestimate the value of having a finsihed basement when you make your offer. This would be my primary concern, because it's not something you can undo.
From a financial perspective, I would be careful about that last risk when making my offer. I just bought a house with a finished basement (there was a permit and everything passed code, so I'm not worried about that part). For me and my needs, it adds substantially to the usable square footage of the home (two "bedrooms" and a large full bath), extra sq footage I couldn't afford otherwise.
The way it was designed, you don't get the impression you are in a finished basement. Everything has been finished very nicely with the same quality of materials in the rest of the house so it doesn't "feel" sub-par. Plus the way the stairs are configured, it flows nicely with the rest of the house and doesn't make you feel you're entering a basement at all.
However, it was very tempting upon initial viewing to consider these extra bedrooms and make a bid as if it was a 4-bedroom house, not a 2-bedroom house with two "bonus" basement rooms that *might* be used as bedrooms (or may someday flood and be completely unusable). I was very careful in determining what I wanted to offer. I did not want to make the mistake of comparing the value of this house to a true 4-bedroom. I compared it instead to a 2-bedroom, and added a little extra for the fact that it had a nicely finished basement. This was exactly how the assessor ended up looking at it, too.
Incidentally, it was advertised by the realtor as a 4 bedroom, but when I saw these two bedrooms, I politely corrected her on that.
I feel sorry for my neighbors who didn't think it through the same way I did; they ended up, IMHO, grossly overpaying for their property. Oh well... I suppose that ultimately when it comes time to sell, I may luck out and find someone willing to make that mistake, too.
Buyer should also be careful when assessing the value of finished attic space.
jen
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snipped-for-privacy@yahoo.com said...

Attic space is typically better than basement space because it isn't below ground. As long as the place is insulater properly and isn't a sauna in the summer and a freezer in the winter it is no different than an upstairs room (other than the extra flight of stairs).
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