Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The seller has to take care of these permits "after the fact". And get the CO
The house cannot be purchased by anyone financing the purchase, as no CO, no mortgage.
Many people do not pull permits with their town because they do not want their taxes to go up.
In my market, when an appraiser finds no CO, they make note on their paperwork and leave.
IMHO this seller sounds like a real piece of work. It's not an FSBO is it?
By the way, the seller has not a leg to stand on.
I think sometimes people also don't take care of permits because they cost hundreds of dollars even if the job is done right. That is why no permit doesn't automatically mean something is wrong.
I asked if this were an FSBO, because any Listing Agent worth 2 cents would explain to their seller that they can't sell their property to anyone who is going to finance the purchase without obtaining a CO. Unless the property is being sold as an "investment" type property and frequently sold for cash.. it is not going to sell without a CO
My present home was a "estate sale" through a Bank's Trustee Department. When they found out there was no CO, they promptly took care of the matter. Cost them a few $$$ and more because after the fact, the cost of the permits were higher!
Our real estate sales contract has a clause about there being no unpermitted work having been completed on the property, or else the seller has to strike that clause.
I read about so many problems on this board that could have been prevented in the first place by using a comprehensive real estate contract that covers these basic things.
You do not use an "addendum" to cancel a contract. At least not in Arizona.
You just need to present a letter cancelling the contract with the (legitimate) reasons why. Have it delivered to the seller and the title company.
This may be different in your state, and this is not intended to be legal advice. If your agent is not able to guide you property, then get legal advice.
If you are getting a mortgage then the contract will state that the contract is contingent on the appraisal price being at or greater than the purchase price.
If there are additions without permits, then it is up to the seller to provide them.
In your case where I would not want to buy a home that has illegal work performed, I would cancel the contract with a written statement that there are illegal additions according to the appraiser, and the appraisal cannot be completed. Therefore, you request your earnest money refunded. The title company will review the contracts to make sure the appraisal contingency is there. The title company will determine, from reviewing the contract and the appraisal report if you get the earnest money refund.
I do wonder why, if there was a home inspection, that the home inspector did not pick up on the illegal additions.
The appraisal CAN be completed: Subject To presenting the permits.
Thanks for the clarification.
That would be sufficient for the op to use to give the seller an opportunity to cure the problem or he could cancel. If the buyer is getting a mortgage, the loan would not be approved until the permit contingency was removed. So if the buyer cannot get the loan he gets his earnest money returned.
If the appraiser were to make the appraisal subject to the building permits then the appraiser would also have to indicate how they developed the appraisal-- presumbly by assuming that the permits were in place. That would require an extraordinary assumption; yet Fannie does not allow the addition of any assumptions in the appraisal.
Of course, there are plenty of sloppy appraisers who would simply check the subject to box and ignore the assumption altogether. It would take a good reviewer to notice that ommission.
A really good appraiser would handle this assignment by contacting the client and letting them know about this permit problem. If it could be cured, then the appraiser would wait until they got a copy of the permit so that they could complete the appraisal without any assumptions that aren't allowed anyway.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
