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Old 08-04-2012, 12:04 AM
 
3,404 posts, read 4,146,730 times
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Quote:
Originally Posted by ocngypz View Post
Very simple.

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.
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Old 08-04-2012, 09:30 AM
 
4,631 posts, read 7,225,566 times
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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!
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Old 08-04-2012, 02:03 PM
 
936 posts, read 1,752,643 times
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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.
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Old 08-04-2012, 06:39 PM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 12,691,275 times
Reputation: 3810
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.

Let us know what happens.
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Old 08-04-2012, 07:52 PM
 
Location: southwest TN
8,182 posts, read 14,289,257 times
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According to the OP's profile, s/he is in Baltimore.
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Old 08-04-2012, 08:03 PM
 
Location: OK
2,717 posts, read 6,300,389 times
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Quote:
Originally Posted by Captain Bill View Post



and the appraisal cannot be completed. .
The appraisal CAN be completed: Subject To presenting the permits.
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Old 08-04-2012, 08:21 PM
 
3,404 posts, read 4,146,730 times
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Quote:
Originally Posted by Annemieke Roell View Post
The appraisal CAN be completed: Subject To presenting the permits.
Yes, this part I don't understand.
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Old 08-05-2012, 08:32 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 12,691,275 times
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Quote:
Originally Posted by Annemieke Roell View Post
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.
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Old 08-05-2012, 10:23 AM
 
936 posts, read 1,752,643 times
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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.
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Old 09-17-2012, 08:34 PM
 
Location: California
4,445 posts, read 5,183,049 times
Reputation: 9180
Here is additional information if anyone is still needing answers.

http://appraisersforum.com/showthread.php?t=189961
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