The ARV only works if an appraiser counts 450 unpermitted square feet

Question

Deal I'm modeling as a career changer, so tell me where I'm wrong. Tax card says 1,450 square feet. Tape says roughly 1,900, because at some point somebody finished a rear addition and a room over the garage and I can't find a permit for either. Purchase would be around 185k, my gut number is 140k plus contingency, and every resale comp that gets me near 470k is 1,850 to 2,000 finished feet. At 1,450 the comps sit closer to 385k, which ends the deal before demo starts.

What I read is that an appraiser measures what's physically there, and that permit status is a marketability comment rather than a measurement question, so finished heated space you reach from inside the house counts as living area regardless. Then a broker told me the buyer's lender can condition on proof of permits and the whole closing sits there. And if I go for a retroactive permit on the addition while walls are open anyway, am I just handing the building department a reason to make me bring the whole house up to current code?

devon_pierce · Answer

My building department quoted 3,200 in retro permit fees and said framing has to be exposed for inspection before they'll sign anything.

carlos_nunez · Answer

ember, the measurement part is roughly right and the conclusion you drew from it isn't. An appraiser can measure the 1,900 and still note the space as unpermitted, and then it's the buyer's lender deciding whether they'll fund against it. That's the part you can't control from your side of the table, and it shows up at the worst moment, week 14, when you're already paying carry.

bramble, careful with the assessor route. Getting the square footage updated on the tax card doesn't legalize anything, it just raises the tax bill and creates a paper trail that the work exists. Two different offices.

The code question depends entirely on your jurisdiction and how the plans examiner reads it. I've got one in progress where opening a wall for new supply lines pulled in egress and insulation on that whole elevation, which was maybe 6k I hadn't planned. Footings under an old addition are the one that scares me, because verifying them can mean excavation. And unpermitted-work disclosure at resale is a state-by-state thing, so ask a local attorney rather than the forum.

The ARV only works if an appraiser counts 450 unpermitted square feet

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