fully renovated property- no permits filed, automatic dealbreaker?

Hi all, I’ve been looking for months for a 2-4 family home, and am getting really frustrated with how impossible it seems to find a home that hasn’t had illegal work done. I’m nervous about paying 700+K for a property that might not be up to code, etc….but I also know that getting permits is a nightmare, and plenty of “legitimate” contractors do illegal work? Recently found a place I actually really wanted, and there were multiple DOB complaints including one that is currently open. In the time it took me to talk to my lawyer who referred me toan expediter (who I’m still waiting to meet with..) the house went into a “bidding war” (so says the broker…who knows, though, it seems like everyone is lying all the time and now the seller wants more money for it.  I feel like I’m just exercing due diligence, but this broker seems to think open permits are no big deal bc of the whole “just don’t let the inspectors in” loophole and that my hesitation cost us the deal. Isn’t it a giant risk purchasing a home with massive amounts of illegal renovation or is it just a problem when you attempt to resell?  Please help this overwhelmed aspiring brownstone owner. Thank you.

lorien

in Dept. of Buildings (DOB) 12 years and 8 months ago

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needmtg | 12 years and 8 months ago

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As dibs says. I bought, and refi-ed twice, a house like this. Granted, the second time my own bank refused to refi for because 12 years ago someone had filed for a reno (some Midwestern bank attorney was nervous,) but I got it thru a broker. If the open issues are small (I had one that said ‘unpainted hallway’ from 1984) you can ignore them. Things you may want to watch out for are major plumbing/electrical issues. You will also have to get it cleared if you do reno under permits. Otherwise, it’s  normal for these parts.

daveinbedstuy | 12 years and 8 months ago

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Most homes have had illegal work done (without permits; up to code or not).  Mine did.  I bought it and sold it without any issues but there were no DOB violations.  Violations need to be closed before financing will close.  I assume you know how to check the DOB BIS site for violations.

BSDOD | 12 years and 8 months ago

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Not sure how successful you will be, finding a house without illegal work done. The housing stock is over 100 years old, so lots of opportunities for people to work without a permit. In the end, you must do what you feel comfortable with.

mortgagepro | 12 years and 8 months ago

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lorien, if you require financing the Open Permits will need to be closed.  It sounds like Realtor does not have the buyers best interest in mind (and you can quote me on that). -Adam Roberts  South Shore Mortgage  631-956-0111 x218  adamr@fast2fund.com

greenmountain | 12 years and 8 months ago

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Yes.  It is a problem that our housing stock is full of shoddy renovations.  Not  everything done legally is so great either.  It gets harder and harder to make it right after each quick renovation for resale, but just as you are a buyer, so there are always people who will buy pretty much anything.

lorien | 12 years and 8 months ago

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jeez, sorry for all the typos.