Buying house with unpermitted conversion? (Seattle: apartment, renting, insurance)

[Tac-Sea]

I'm looking at buying a house with a basement finished as a mother-in-law apartment in the basement (full kitchen, bath, laundry, living room, bedroom, separate entry) and a garage converted to a master bedroom and bath (upstairs). This is in King County.


The guy who owns it is a contractor and it LOOKS professionally done, though I don't know if he did it. None the less, the house is only listed for the permitted square feet and bedrooms, not the finished MIL apartment in the basement.


What am I getting into here? My inspector will only be able to tell so much about whether it is up to code. To get it permitted the city has to come out and inspect.

[Hemlock140]

The building inspector cannot tell if it's up to code without seeing the wiring and plumbing, the framing and headers over doors and windows. They may not even allow the conversions, depending on the zoning, minimum sizes of lots and setbacks, off street parking being reduced by lack of a garage and other factors. They could require that it all be taken out, as could a lender especially if the load requires PMI. It can be very risky, but if you love it and the location, you can always write an offer contingent on the seller getting it permitted. Of course, the assessed value will go up and so will the property taxes and insurance cost.

[RotseCherut]

There are so many houses not built up to code in King County, including the one I am renting. You would be surprised.

[homesinseattle]

As Rotse says, a lot of these exist. Fairly common when I am listing a home to sell for a client, they tell me they did remodeling years ago (or recently) without permits. Often, the work was done by a talented friend or by the client themselves. On the required property disclosure form, the seller will write "remodeled without permits, excellent work quality". We list the home with this disclosed, it often doesn't seem to be s deterrent to sale. I'm certainly not advocating for you to do non permitted remodel, just agreeing that they are quite common.

Similarly, when I am representing a buyer, we find quite a few places like this, some are lovely. From a functional standpoint, here's how it happens. My client tells me they are very interested in a home. I find out about the remodel not permitted. They sometimes say that it doesn't matter to them. We have the home inspected well (I know inspectors with amazing infrared cameras that can see lots of things behind walls). They buy the home, knowing there is a good change that the city or planning department will never bother them about the past remodel. I guess the feeling is that if the city were to ever have a question, they would work with them rather than penalize them, as they didn't do the work. In fact, I've had clients approach the planning department about getting the Non permitted part of their home permitted. In this case, the agency has seemed appreciative of the honesty.

At the end of the day, it is a personal decision. Certainly, fully permitted homes are better. That being said, in certain parts of town you will find more of this kind of home, especially "vintage and historic" ones, often which can be conceived and executed in a lovely way.

[flyingsaucermom]

Originally Posted by homesinseattle

As Rotse says, a lot of these exist. Fairly common when I am listing a home to sell for a client, they tell me they did remodeling years ago (or recently) without permits. Often, the work was done by a talented friend or by the client themselves. On the required property disclosure form, the seller will write "remodeled without permits, excellent work quality". We list the home with this disclosed, it often doesn't seem to be s deterrent to sale. I'm certainly not advocating for you to do non permitted remodel, just agreeing that they are quite common.

Similarly, when I am representing a buyer, we find quite a few places like this, some are lovely. From a functional standpoint, here's how it happens. My client tells me they are very interested in a home. I find out about the remodel not permitted. They sometimes say that it doesn't matter to them. We have the home inspected well (I know inspectors with amazing infrared cameras that can see lots of things behind walls). They buy the home, knowing there is a good change that the city or planning department will never bother them about the past remodel. I guess the feeling is that if the city were to ever have a question, they would work with them rather than penalize them, as they didn't do the work. In fact, I've had clients approach the planning department about getting the Non permitted part of their home permitted. In this case, the agency has seemed appreciative of the honesty.

At the end of the day, it is a personal decision. Certainly, fully permitted homes are better. That being said, in certain parts of town you will find more of this kind of home, especially "vintage and historic" ones, often which can be conceived and executed in a lovely way.

Are the permits costly or just time consuming... why else would this be common?

[Ruth4Truth]

It's very common for houses with non-permitted improvements to be bought and sold. One of the problems that leads to this situation is that the permit process can take between 6 months to a year; the permit office is always backed up. I know of no cases where the city demanded that conversions be torn out, though.

[Gardyloo]

You also can't just lump everything together under the term "permit." There are different permits for different types of work - electrical, general building/structural, modifications to water, sewer or natural gas systems...

The city's main concern in permitting is safety - they don't want homes to burn down, or collapse in an earthquake. The insurance companies also have an interest in this, as you can imagine.

Nevertheless, I suspect the majority of home improvement projects in Seattle that technically ought to be permitted proceed without permits, out of the perception that getting permits will be time-consuming and expensive, which it might or might not be depending on specifics. But I'm not aware of anybody I know who has gone to the City and asked for a retroactive permit for improvements made by a prior owner. I doubt the City would even consider it; without opening walls the city couldn't vouch for compliance, and issuing a permit without visual inspection would potentially put the city in a liability position.

[RVD90277]

It's common but I wouldn't recommend going this route because you won't really see much of an increase in value since this work is not part of the official specs of the house.

But if you just want to do it because you will be living there for a long time and need the work done and don't care about recuperating some of that cost later when you sell...I suppose it's fine.

[daberkow]

Originally Posted by RVD90277

It's common but I wouldn't recommend going this route because you won't really see much of an increase in value since this work is not part of the official specs of the house.

But if you just want to do it because you will be living there for a long time and need the work done and don't care about recuperating some of that cost later when you sell...I suppose it's fine.

I don't really agree here. For one thing the local MLS in Seattle seems to not care what agents list things for- I've been in plenty of basements with low ceilings and concrete floors that were included in the square footage of the home on the MLS. Just call it "possibly nonconforming" in the notes and your closet can be a bedroom too! Maybe they will tighten the reins in a slower market, but these days it seems anything goes. Some listing agents are more honest than others of course.

People will pay what the place is worth. A house with a unpermitted second bathroom and kitchen remodel is going cost a lot more than a comparable house with only one bath and an old kitchen, regardless whether it is on the listing or not. Some people prefer unpermitted things as then they don't have to pay taxes on it.

[Tac-Sea]

I called the city planning office, and talked to one guy, who transferred me to another guys voicemail. It's a 900 square foot finishing of basement as a MIL apartment, and a one car garage converted to a master bed/bath.


The one thing that I find telling: the basement, if permitted, would add easily 50-75K in value. For all I know he couldn't get a permit...otherwise, why wouldn't he just get a permit and then sell? He's leaving money on the table by not doing so...


My RE agent has been utterly useless in this regard, just kind of prodding me along without much comment on the issue. I'm considering dumping him and the contract on this house unless I can get this cleared up.