Open Permits

Open Permits Can Delay Closings for Homebuyers

As the real estate market heats up, buyers are choosing to make "as is" offers. Accepting an "as is" offer waives the right to home inspections in hopes of beating competing offers. An outstanding permit issue could be lying dormant. Until the lender's appraiser inspects the property and discovers the issue, the buyer's financing timeline could be at risk.

Don't Delay Your Closing

Buyers usually have no reason to suspect that an outstanding permit exists on a home they intend to purchase and rarely request that sellers disclose work from years ago. Open permits, unrecorded easements or building code violations are not listed on the preliminary title report and not covered by title insurance. Once discovered on an appraisal, lenders are unable to provide financing on a property with open permits. Homebuyers should always seriously weigh the risks of an "as is" offer. We recommend you hire a certified home inspector to head off any potential issues. Permitting issues could delay or make financing a property unfeasible. A permit may have been opened before the current homeowner owned the property but was never closed. This may affect the sale of the home if the new buyer cannot finance the property until the permit has been closed. Proactive real estate agents can help avoid financing delays by bringing issues to the attention of their client and lender as soon as possible, such as:

• Un-permitted work
• Open permits on a property
• Obvious building code violations
• Health and safety hazards
• Recorded or unrecorded easements

Your mortgage lender and title company can help pull up any permit history for a potential listing or property clients are looking to purchase. Local permit history searches are also usually available online from your local regulatory building department.

It's important to clear up un-permitted work early and avoid closing delays. If you have questions about financing or would like help researching a property's permit history, don't hesitate to contact PRM today!