Market Wise Q&A column: Permit Cat-and-Mouse with Seller’s Agent Requires Action

Pat Kapowich for the San Jose Mercury News

 

Q: We are buying a property where the family room and master suite were added years apart from one another. We were repeatedly told that the previous sellers “had permits pulled, but never completed. However, our bank appraiser stopped the progress of her work and informed us she cannot give the additions value since they are not permitted.” The frustrating days click away as the seller and her agent keep talking about an old permit for a rec room and the seller’s appraisal performed “just a couple of years ago. Our broker keeps visiting the city building department and providing corrective permit information to the seller via her agent, which falls on deaf ears. What gives? Should we issue another written extension of contract deadline?

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A: You bet. Have the seller and her agent put your money where their mouth is by opening a voluntary code compliance case. Stop the nonsense. If the seller and her rep are so confident about their property they should welcome the governing building inspector to their property especially since they kept mistakenly informing you regarding the additions. In 2009, lenders and appraisers are actively and independently watching their own backs. So, if your buyer’s broker can persuade the seller to invite a city or county building inspector to personally inspect these additions, it’s well worth the wait. Voluntary code compliance cases are rare because the building inspector can either approve the unpermitted additions or ask for walls, ceilings and floor to be open for future visual inspection. Conversely, the construction in question can be condemned outright.If this does not work out in your favor, issue a release of contract/deposit and move on. Relax, and let a skilled agent guide you safely over the often-uneven roads of real estate sales. Strong buyers can and do promptly go and buy another property while they know the inventory. Weaker buyers allow themselves to be psyched out by an unsuccessful transaction. These ambivalent buyers usually sideline themselves until the market shifts and/or interest rates increase.

9/5/09

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Contact Pat Kapowich, The Santa Clara
County Association of Realtors President’s
Choice Award Winner for 2013
at (408) 245-7700 and/or
Pat@SiliconValleyBroker.com