“Permits? We don’t need no stinkin’ permits!”…Do we?

March 20, 2008

You've undoubtedly seen this clip from the classic flick “The Treasure of the Sierra Madre” from 1948….


Perhaps the clip captures the spirit of my parent's generation when it came to remodeling or modifying their homes. Permits? Are you kidding me? They didn't want any stinkin' permits. Back then, permits were expensive, time consuming to obtain, and required inviting the unwanted building inspector to the party just to he could tell you all the things he wanted re-done. Consequently, today you'll find countless homes where second-floors were added, the number of rooms increased, and bathrooms completely redone — all without permits.

So should we uphold the same spirit today? With all due respect to my dad, the answer is a big NO. Here's why:

Houses with the required permits are worth more than those without.

Consider the following very typical example: A homeowner takes a 2BR/1BA 1,200 square foot, post-WWII rancher and adds a master bedroom suite and bathroom, in the process adding another 400 square feet. He decides to enlist the help of some qualified friends in the construction business to do the work for a discount, and he doesn't bother to get the required permits.

10 years later when he decides to sell his home, our hypothetical buyer is shocked to discover that he can't sell his home as a “3BR/2BA 1,600 square foot home”   Why? Because the County as no record of the improvements, since the City never approved of the construction.  The listing agent is asking for a lawsuit if he represents this as a 3/2 when the County records show it otherwise.

Of course, this isn't the end of the road for our hypothetical buyer.  He can apply to get the improvements permitted and registered after the fact.  Or, he can list the property as a 2/1 with an “un-permitted bathroom and bedroom.”  But for obvious reasons, it isn't the same as a legitimate 3/2.

The old excuses of permits being “too expensive, too hard to get, etc…” don't apply anymore, either.  Building Departments in most cities have made the process infinitely easier by doing as much of it online as possible.  You can apply for a permit, track the approval process, and be make modifications all online in many communities.  Chalk one up for the Internet.

The analogy of the used car is a simple application of this philosophy:  A used-car with a full documentation of all maintenance is always worth more than the same car with no records.  It's no different with houses.

So if you're planning a remodel, be sure to get all of the permits that are required.  When it comes time to sell your home, you'll be very glad you did.

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