Permitting As Builts.... at the last minute

[Kapohocat]

For those of you with unpermitted structures, this is coming up again and again now with purchases at the lower end of the real estate slump and those who are selling.

It is almost impossible to get permitted and finaled a project before escrow closes (unless it is a 90 day escrow or more) when it is found in escrow by the home inspector or appraiser that you have a unpermitted deck, garage, gazebo, whatever.

(and VA loans will not let this go through and just not consider it in the appraisal - it must be rectified.)

In addition, you must have a licensed GC sign on to your project so that the 1 yr rule does not affect the escrow or sale.

So please think ahead! And dont think I am immune, I am taking care of my mom's unpermitted structure now in case she decides to sell in the next year or two. I had to laugh as I was sitting on this nice deck, and went WHOOPS! lets get this done now!

[Obie]

I thought that the unpermitted structures were ok as long as no value was placed on them.My neighbors here bought their house that had an unpermitted addition and an in ground pool.They did have to tear down a catchment that was encroaching on the neighbors property.

I bought my home here by taking a new first mortgage on a house on the mainland,paid cash here and then sold the mainland house.

[Kapohocat]

quote:

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Originally posted by Obie

I thought that the unpermitted structures were ok as long as no value was placed on them.My neighbors here bought their house that had an unpermitted addition and an in ground pool.They did have to tear down a catchment that was encroaching on the neighbors property.

I bought my home here by taking a new first mortgage on a house on the mainland,paid cash here and then sold the mainland house.

---

They are okay if no value placed on them for some loans. VA loans wont fly though. Or like you did, pay cash.

And in the current market, people need all the SF on the appraisals they can get. On one I just worked on if they dropped the uncompleted (not finaled) permit on lanai, the loan appraisal would drop $30K. This lanai was from back in late 1980's.

But Betty, with all your experience, I am sure you are an old hand at knowing in a pinch how to navigate around this for your clients.

[ZZFlapper]

So my parents have a ppty down in Opi area that they need to sell. I need to get them back to the mainland.

I know that no completions notices were ever completed or signed off and a buyer probably won't be able to get a loan on the ppty.

So do we sell it as is.... ppty only? [?]

How do I go about determining the FMV on this?

Appreciate any ideas.

Ocean view and nice spot

[jdirgo]

A lot of it depends on how the permits were pulled --- were they owner-builder or contractor? If contractor, is the contractor still in business? How old are the permits? There's a lot of variables that can affect fair market value as well as the emotional factors related to how important is it to get them moving soon. If you bargain-price it to get them going soon, it will move a lot faster than someone trying to both sell AND get top-dollar. Frankly, you can't have both.

If you'd like, send me whatever info you have on the property (TMK would be best) and I'll research it and let you know what I find and give some recommendations. And as anyone who knows me in real-life will tell you, my advice is free and without obligation.

John Dirgo, R, BIC, EcoBroker, ABR, e-PRO
Aloha Coast Realty, LLC
808-987-9243 cell
http://www.alohacoastrealty.com

[ZZFlapper]

Thank you John

I will email you the specifics. My father was licensed contractor in CA long ago and they have been in Hawaii over 20 years. It was owner- builder. They need to move back over here due to health issue. I understand the market has tanked so I am realistic and they must be as well.

Thank you for your response. Its a good ppty but not well maintained for many years now and I am too far away to assist them

[John S. Rabi]

Your biggest problem will be the buyers inability to get a loan, so you will have to price it way below value to get cash buyers. As to John Dirgo, you will be in good hands there!

Aloha,
John S. Rabi, GM,PB,ABR,CRB,CM,FHS
808.327.3185
johnrabi@johnrabi.com
http://www.JohnRabi.com
Typically Tropical Properties
"The Next Level of Service!"

[Kapohocat]

In addition, if the loan company will take it as uncompleted, when I spoke with Nani on 12/31 she said the Bldg Dept had been instructed to return to accepting change of ownership from Owner Builder 1 to Owner Builder 2 on the Bldg permit even if the framing had been completed. For a few months there were no changes being allowed after that point or so was the party line although some did go through. Owner 1 to GC 1 is now back to being allowed after framing also (but that info is almost 4 days old now.)

[Kahunascott]

Another problem is insurance. My friend just bought a house with an unpermitted deck and sliding door. The insurance company made him cut the deck 2 feet away from the house and board up the door before insuring the home.
We were lucky when we bough our home 4 years ago with a converted lani to a master bedroom and a half bath to a full.
I hired a professional to help in the permitting, yes Kapohocat. As we were new to the Island she walked us through it and man does she have contacts down at the DPW.
2 smoke detectors later and pow all permitted. We even had an open repair permit that never got recorded and she took care of that for us to.
Take the easy road and use her.


If you think health care is expensive now, wait until you see what it cost when it’s free

[Kapohocat]

I opened a can of worms on my mom's. So many things had not been taken care (pool from 1987 never finaled, open elec permits, etc. long before my parents purchased home in 1998).

The Bldg Dept has been helpful over phone and across counter in clearing some items, and also John Dirgo gave me some suggestions to recoup her expenses incurred for some things (outside redrawing new deck). But that darn pool. Contractor out of biz since 1992, electrician retired since 1990.

The gist of this is that during the 80's and before the records were on the computer there is much that is missing from the records. If it isn't on the physical records and the inspector did not make notes, it may be a redraw and updating.

I have never felt so helpless in doing what I do as I have felt trying to get my own parent's quagmire fixed. The only good thing is that I knew to do it NOW, not if Mom makes a decision to sell in 1-2 years.