Today I’m in downtown Salt Lake City to share a brief word about the importance of permits when buying and selling real estate. There’s a big discrepancy between the types of people who’d rather not get a permit to buy and sell and those who prefer getting a permit for every little thing. I have a few pieces of advice to share on this matter based on my experience buying and selling real estate. When you get a permit, there are a couple of things to think about.
First of all, if you don’t get the right people in place, it tends to cause delays. A permit states that you’re pulling the permit itself as the owner or on the investment, and you’re having someone else do the work. The owner can do a certain portion of the work or hire a contractor who practices the trade. That said, a permit allows you to get the right people in place so you don’t experience delays.
Second, a permit ensures the work is done correctly. I remember once wanting to create a value-add for an investment property of mine by doing some remodeling. Specifically, I wanted to remove a wall to make a big, open living space. It was a multiunit property, though, so the wall for the upper unit (which I wanted to remove) didn’t align with the wall for the bottom unit. It didn’t look like much, but it was enough of a gap that I felt like I needed to hire an engineer to ensure the work was done correctly. Sure enough, he saw what needed to be done and changed the plan completely. Thus, we were able to do the job quicker and more efficiently. The holding costs alone would’ve been an extra $2,500 if I never hired the right person to do the job.
Finally, permits can help you avoid complications during a sale. Many people are moving to our area, and if they see a lot of work being done to the home they want, they’ll call the county or city and ask where the permits are and what kind of work is transpiring. If they find out that no permits were pulled, they may back out of the deal. They won’t pay a premium for a renovated property where the work wasn’t professionally done. Instead, they’ll look for other new construction properties that do have the proper permits and warranties.
The bottom line is that you should always consider pulling permits if you’re making massive improvements to a property instead of, say, cosmetic changes. If you want a deeper understanding of real estate permits, you can see their criteria on city and county websites. I wouldn’t recommend pulling a permit for every single issue, but structural tasks that qualify as tradecraft should be done correctly. That way, you have confidence in dealing with any issues.
As always, if you have questions about this or any real estate topic, don’t hesitate to reach out to me. I’d love to hear from you.