Conventional Loans & Unpermitted Structures

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Real Estate Agent with Kolsky Group/Spellens Realty 01311273
http://actvra.in/Ngl

Conventional Loans & Unpermitted Structures

 

Conventional Loans & Unpermitted StructuresReal Estate Question about conventional loans & unpermitted structures- I have a home with an unpermitted structure (An 1800sq Ft. Guest House) the property was originally bought years back with no guest home, and I am presently attempting to refinance with a conventional loan. I am wondering what the appraiser will do with the unpermitted guest house. There are numerous, unpermitted structures in my area. How should I handle this with the appraiser?


A Perfect Topic! “Appraiser are devoted to the lender, they are the so called “eyes and ears” of the lender. I am not an appraiser, but let me step in and play one for a minute. When it comes to structures that are unpermitted, the theory here is straightforward that if a structure is unpermitted, it cannot be protected through insurance, hence, not counted. Something that's not permitted cannot be insured since its unknown what building standards were applied or if was built to current codes.

 

Conventional Loans & Unpermitted StructuresThe lender must be protected in case there’s a problem and the lender needs to take the property back. If an appraiser gives the un-permitted structures(s) value, then there’s a problem and the bank gets the property, they bank/lender would lose out on any value given to the un-permitted structures. It's funny how things work sometimes; "the guidelines" The guidelines for most lenders are the appraisers, too and since all appraisers work for the lender, they work extremely close together?


To answer the question frankly, just be candid on what is permitted and what isn't, telling what you know is the best policy to take. If there are permits, please obtain copies of them, then that way you can hand the appraiser a copy which will be included in the appraisal.


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Comments 5 New Comment

Rainmaker
164,969
John & Irma Nelson
San Antonio Real Estate Agents - San Antonio Homes
San Antonio Real Estate Agents with Keller Williams Realty

great article on a very sticky topic - i haven't run across one of these in a long time but good to know - thanks for sharing

December 19, 2012 04:26 PM
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Michelle Carr-Crowe Just Call 408-252-8900 Luxury Homes in Top Silicon Valley Schools-San Jose, Cupertino, Saratoga & Palo Alto
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I recently learned that a lot varies on whether it is an unattached and separate unpermitted structure as opposed to one that is attached.

December 19, 2012 04:31 PM
Rainmaker
672,749
Jon Kolsky
REALTOR® Long Beach, CA
Kolsky Group/Spellens Realty

John & Irma~ I thought it was worth sharing too, every once in a while we'll run into this! Thanks!

Michelle~ that's interesting, although I am not an appraiser, it looks like I just played one....Thanks!

December 19, 2012 04:37 PM
Rainmaker
311,360
John G. Johnston
An Exclusive Buyer's Agent ~ Westcliffe, CO
John G. Johnston & Associates, LLC

Jon  This just happened to me today.  I was showing a home that the listing agent showed 3 bedrooms.  I printed the Assessor's page yesterday and they only showed 1 bedroom.  Sure nuf...no permit.  I wonder what the Realtors liability is when they advertise this?  Thanks

December 19, 2012 06:20 PM
Rainmaker
672,749
Jon Kolsky
REALTOR® Long Beach, CA
Kolsky Group/Spellens Realty

Jonn~ who knows about the liability, most agent have E&O insurance??? But what a joke and waste of time...thanks for sharing and making my blog better!

December 19, 2012 10:13 PM
Rainmaker
672,749

Jon Kolsky

REALTOR® Long Beach, CA
Free to answer any Real Estate questions
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I love real estate, as well as invest in real estate, but I don't stop there, I also offer exceptional real estate assistance to buyers, sellers, and investors. I intend to make each client feel exceptional (and they are!), and details are what I pay close attention to. I appreciate what my clients say, I listen to my clients, and I hear their needs..I am perpetually upfront, and to the point...and I find quick and thorough solutions to any real estate issues that arise. Jon Kolsky - Agent at Kolsky Group
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