Unpermitted work on a home can be intimidating for sellers. Whether it’s a kitchen remodel done without pulling permits, an added deck, or electrical upgrades that were never inspected, buyers often worry about safety, liability, and legal compliance. However, handled properly, unpermitted work doesn’t have to prevent a sale—or drastically reduce your home’s value.
I’m Dennis Loewen with North and Main Homes, and in this guide, I’ll walk you through the steps to navigate unpermitted work confidently while keeping your sale smooth and compliant with California law.
Step 1: Identify What’s Unpermitted
The first step is understanding what work in your home was actually permitted. Sometimes homeowners believe certain projects didn’t require permits, or permits were pulled but never finalized. Other times, work was completed without any city approval.
Start by reviewing your home’s city records. San Jose’s building department maintains records of all permits and inspections. If your work doesn’t appear there, you may need to hire a licensed contractor or home inspector to identify the unpermitted improvements. This is especially important for structural changes, electrical upgrades, plumbing modifications, or additions that affect safety and resale value.
Knowing exactly what is unpermitted gives you the clarity to disclose properly, assess potential risks, and make strategic decisions about how to proceed.
Step 2: Disclose Honestly
California law requires sellers to disclose known issues, including unpermitted work. Failing to disclose can lead to serious legal problems, including lawsuits and the need to pay for repairs or fines after the sale. Full transparency builds buyer trust and prevents complications during escrow or after closing.
When disclosing, be specific about what work is unpermitted, why it’s unpermitted, and whether it’s likely to pose any safety or code issues. For example, you might explain that a bathroom was expanded but never finalized with a permit, or that electrical wiring was upgraded but inspections weren’t completed. Buyers appreciate clarity, and disclosure protects you legally.
It’s also worth noting that in some cases, unpermitted work may not be a deal-breaker for buyers—especially investors or flippers—if the overall condition of the home is good and pricing reflects any potential risk.
Step 3: Decide How to Handle It
Once you’ve identified and disclosed unpermitted work, you have several options:
-
Sell As-Is – Many homes with minor unpermitted work sell as-is. If the work is cosmetic or doesn’t affect structural integrity or safety, you can price your home to reflect the risk and allow buyers to take responsibility for any permits or corrections.
-
Offer a Credit – Another option is to provide a repair or permit credit at closing. This lets buyers know upfront that funds are allocated to address unpermitted work, giving them flexibility while keeping your upfront costs low.
-
Pursue Retroactive Permits – In some cases, it’s possible to apply for retroactive permits. This usually involves hiring a licensed contractor to ensure the work meets code and submitting inspections to the city. Retroactive permits can increase buyer confidence but may require time, money, and additional paperwork.
The best choice depends on the type of work, cost, and your timeline. A licensed real estate professional can help you weigh the pros and cons and choose the most efficient route.
How Buyers Perceive Unpermitted Work
Understanding buyer psychology is key. Some buyers are cautious and may request an inspection contingency, escrow holdbacks, or price reductions if unpermitted work exists. Others, like investors, are comfortable taking on projects as long as pricing reflects the risk.
Setting realistic expectations from the beginning helps minimize surprises. Pricing your home competitively, being upfront about work that lacks permits, and highlighting the positives of the property can make your listing more attractive.
Preparing Your Home for Sale
Even with unpermitted work, presentation matters. Buyers want to see a well-maintained home. Consider completing minor repairs, staging, decluttering, and cleaning thoroughly. These steps help buyers focus on the value and potential of the property rather than the paperwork history.
Professional photos, 3D tours, and video walkthroughs can also highlight your home’s best features, shifting attention away from minor permit issues while demonstrating quality and livability.
Legal and Financial Considerations
Unpermitted work can affect your insurance and liability. Before listing, check with your insurance provider to confirm coverage. Some policies exclude certain unpermitted work, which buyers may also consider.
Financially, it’s important to discuss the situation with your lender if you’re carrying a mortgage, as certain loan types may have requirements related to permits. A proactive approach ensures a smoother transaction and avoids surprises at closing.
Local Market Context
In San Jose, many buyers are savvy about permits and home upgrades. Neighborhood trends, property values, and demand affect how unpermitted work is perceived. High-demand areas may tolerate minor unpermitted improvements, whereas in lower-demand areas, buyers may be more cautious.
Partnering with a local real estate professional helps you navigate pricing, disclosure, and negotiation strategies specific to your market. They can provide insight into what buyers in your price range and area are willing to accept.
Moving Forward With Confidence
Selling a home with unpermitted work requires honesty, preparation, and strategy. By identifying the work, disclosing clearly, and choosing the right handling approach, you protect yourself legally, maintain buyer trust, and keep your sale on track.
Whether you sell as-is, offer credits, or pursue retroactive permits, having a plan ensures you can move forward without stress.
🎥 Watch the full video here → Selling a Home With Unpermitted Work
For professional help navigating unpermitted work in San Jose, contact Dennis Loewen with North and Main Homes. With the right strategy, even homes with unpermitted improvements can sell successfully.
