Buying a BK townhouse that was renovated without permits
We have been looking for a townhome in Bed Stuy, Crown Heights or Bushwick and literally everything we see has something wrong most of the time it’s no permits on the gut reno, shady DOB status, shady ACRIS status….we have finally found a great place but the reno was done with no permits even Alt 2 – but the ACRIS history seems to be OK and we think we can get an LNO. How bad is it to buy a home that was reno’d without permits?
Guest User | 5 years and 9 months ago
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Guest User | 5 years and 9 months ago
Hello OP (Tucker Lucille), did you end up buying the renovated home without permit?
lkrshacmzcy | 5 years and 9 months ago
True. I am against the flipper mentality after having had worked for a developer and thinking back to the meetings we had to “trim the costs” at virtually any aspect.
lkrshacmzcy | 5 years and 9 months ago
True. I am against the flipper mentality after having had worked for a developer and thinking back to the meetings we had to “trim the costs” at virtually any aspect.
hkapstein | 5 years and 9 months ago
@chrispetri, yes escrow can be used in your type of transaction and could make a lot of sense, but a bedstuy flipper will know it’s a writeoff.
lkrshacmzcy | 5 years and 9 months ago
“The answer is not to pay a purchase price that reflects a full reno premium, and let the house go if someone else is willing to pay it.”
That is the perfect philosophy. Our company was going to move on a property in RedHook as another satelitte facility. It is a buiding we service, so we know the condition of it and made an offer reflecting that. We also built the offer with a 60K escrow account due to not being able to perform a Phase One on the soil (RedHook…). They laughed just like you did UrbanDad. That was three years ago, the property is still unsold and now at a price drop of 90K as another building went for above neighborhood expected value.
Yes you can either drop your offer or create the Escrow; I prefer the Escrow because it shows that I believe in the value of the property but weary the seller might not know something (put faith in the seller and they respond positively).
I only post here of my own experiences working and living in Brooklyn to give a refelction for others to use during their own deliberation.
lkrshacmzcy | 5 years and 9 months ago
“The answer is not to pay a purchase price that reflects a full reno premium, and let the house go if someone else is willing to pay it.”
That is the perfect philosophy. Our company was going to move on a property in RedHook as another satelitte facility. It is a buiding we service, so we know the condition of it and made an offer reflecting that. We also built the offer with a 60K escrow account due to not being able to perform a Phase One on the soil (RedHook…). They laughed just like you did UrbanDad. That was three years ago, the property is still unsold and now at a price drop of 90K as another building went for above neighborhood expected value.
Yes you can either drop your offer or create the Escrow; I prefer the Escrow because it shows that I believe in the value of the property but weary the seller might not know something (put faith in the seller and they respond positively).
I only post here of my own experiences working and living in Brooklyn to give a refelction for others to use during their own deliberation.
hkapstein | 5 years and 9 months ago
I just thought of something that needs to be said. If they agree to a 60k escrow, then that means you could offer 60k less and they would take it. That’s something to watch out for. It might be an interesting way to get them to reveal price weakness though.
stevecym | 5 years and 9 months ago
sticks and stones, it may not be the amount saved by not having permits but the amount saved by the corners that these “contractors” cut and a whole heap of other things that they manage to save money on. its not really a way any of us who care about the bigger picture and society want to go because this industry exists not only by not getting permits but by doing all sorts of other things wrong (i see a lot of construction debris dumped on the highway over here by me (and by the park) and i can only imagine the kind of people the contractors are who do this; they don’t give a crap about anyone).
sticksandstones | 5 years and 9 months ago
How much do you save by not getting permits? Not a rhetorical question- I would like to know the dollar value. When my friend purchased his Bushwick 2 family a couple of years ago he used illegal work that had been done as leverage to get the price down from the seller.
stevecym | 5 years and 9 months ago
the guy down the road from me questioned something as he was buying his house and the seller swore all over that it was legal. so the buyer said “put that in the contract” and the seller did. when the DOB caught him a few years later and made him have it made legal (drawn and filed), the new owner went back to the seller who refused to pony up and he sued him and won.
slopefarm | 5 years and 9 months ago
LOL, U-dad! If the OP posts the recording, we’ll need a trigger warning. No one’s agreeing to a 60k escrow to cover the fear of shoddy work behind the walls. The answer is not to pay a purchase price that reflects a full reno premium, and let the house go if someone else is willing to pay it.
hkapstein | 5 years and 9 months ago
Yes, if the OP is still reading, please ask your seller for a 60k escrow. Record the response on your phone and post it here if possible.
lkrshacmzcy | 5 years and 9 months ago
If a home was renovated prior to 2006 there is a high chance there was no permit pulled let alone the work would not come to current code; even permits do not mean it was done to code. I look back at projects before my time from my three employers and always am shocked at what got done. Remember: Self-Inpsections were trade workers best friends back in the day; inspectors rarely actually showed. I looked back at a project (previous employer, not current) who did a self certified inspection for a job they had not even started yet! Wild stuff!
Having a professional walk through to inspect the visible is a good start to the situation. If they are good, it can give them insight onto the unseen work as well. It can also help build an arguement for an Escrow account. If you can work an Escrow into your contract it is HUGE.
I had a client purchase a beautiful home right in Brooklyn Heights. It had a fairly large Escrow built into the contract from the seller (60K+) so they were weary. We helped increase it through some walk throughs. The building ended up having major Plumbing Issues and the Escrow really helped them out.
lkrshacmzcy | 5 years and 9 months ago
If a home was renovated prior to 2006 there is a high chance there was no permit pulled let alone the work would not come to current code; even permits do not mean it was done to code. I look back at projects before my time from my three employers and always am shocked at what got done. Remember: Self-Inpsections were trade workers best friends back in the day; inspectors rarely actually showed. I looked back at a project (previous employer, not current) who did a self certified inspection for a job they had not even started yet! Wild stuff!
Having a professional walk through to inspect the visible is a good start to the situation. If they are good, it can give them insight onto the unseen work as well. It can also help build an arguement for an Escrow account. If you can work an Escrow into your contract it is HUGE.
I had a client purchase a beautiful home right in Brooklyn Heights. It had a fairly large Escrow built into the contract from the seller (60K+) so they were weary. We helped increase it through some walk throughs. The building ended up having major Plumbing Issues and the Escrow really helped them out.
sixyearsandcounting | 5 years and 9 months ago
Urbandad: yes, and even with a legit contractor who is not going to cut corners, a homeowner will be tempted to go the no-permits route rather than face delays, annoyances, and tremendous cost increases as a result of being a law-abiding citizen. For one thing, the DOB should have *more* inspectors out there to reduce the waiting time for inspections.
hkapstein | 5 years and 9 months ago
The problem is that regulations only impact people that follow regulations. There is clearly a concensus here that it doesn’t matter if work was done without permits. But that opens the door for flippers. If you could get a permit easily, and use licensed insured people without being a huge developer, I think people would do it, and no one would want to buy a house that was built by sketchy flippers. But instead, the typical policy response to dangerous work done without permits is to tighten the permit requirements. This makes it even harder to get a permit, reduces the number of legitimate constructions going on, and creates even better profit margins for flipping. A homeowner who needs to get permits won’t be able to outbid a flipper because the homeowner will want to get permits and insurance, and do good quality work, while the flipper will grab a couple guys from the home depot parking lot and sheetrock over everything that needs work.
stevecym | 5 years and 9 months ago
boo and urbandad, thank you for the discourse.
i will open up a little here now. the reason i get so mad about this behavior is those people make more money than i do. regulation costs me money and i don’t ever want my son to see my name in the NY Post. when i have employees with me i tell them “if we do that, we can end up in the NY Post”. some people don’t give a damn.
greenworks | 5 years and 9 months ago
until the market dries up for these flips, they are going to keep doing them, and then we get the regs steve mentioned.
How many times over the years have we tried to dissuade people from buying flips on this forum? I have also personally over the years tried to dissuade anyone who’s asked me from buying a flip —
But they never listen — and then they come complaining here, or rely on me and hubby to come bail them out and assist in overseeing their emergency repairs.
Steve and Urban are totally on it here — but until people actually listen and vote with their pocketbook, it isn’t going to change until we get yet another onerous regulation.
stevecym | 5 years and 9 months ago
urbandad: if these people cannot do this responsibly – and that means to the community at large, they should not be doing it. In this society, no one is forces us to do what we do for a living. if we cannot make money doing something legally and safely, its time to do something else.
this is how regulation gets put upon all of us – because of the bad actors. and while i think regulation is good because it cleans it up, i also have to work in this as well and i don’t want unnecessary regulation.
people reading this, who “think globally, act locally”, will realize that if we took the totality of this work being done around the city it would equal a good size corporation and if that corporation was breaking the same laws that these flippers and other miscreant contractors break, they would be writing government agencies and their congress person. and again, this is how we end up with regulation.
i realize you were just making a point urbandad and i am gl ad you made that point. but the flippers don’t have to exist. there are plenty of people willing to buy homes and go through the motions to renovate them properly.