Do permits enhance a property's value?

[JoeT]

What's your opinion on this subject? I've read that pulling the proper permits, and being able to show that you've done so, improves the property's value on the market. I'm not sure that I agree with that, and no data was offered to suggest that it's true. I think building upgrades, or perhaps even a perfect home inspection, elevate a property's value, but I doubt most buyers consider building permits in their assessment.

 

[Eric]

I'm not sure having everything properly permitted would increase a property's value, but it would certainly help the property retain value. For example, if you need to make a claim on your homeowner's insurance for damage to a renovated area but never got that area permitted in the first place, your insurance may not cover you. When you go to sell your house, the home inspector or buyer's real estate agent may spot that gap in permitting and use it to their advantage during price negotiations.

 

[Savannah]

I agree with Eric. Logically, I don't see that permits have any effect on increasing the value of the property. However, the lack thereof might cause the property price to decrease, should you want to sell it at some point.

 

[Nomad]

Just because you have acquired all types of permits to build the property does not necessarily mean you get a better price for your property, however, it is true that if you have permits, you can easily sell the property. If you try to sell the property that does not have required permits, you will be asked to get the permits and also pay fines for not acquiring permits in time.

 

[Jake]

I think the main takeaway is that permits provide comfort when there is a lot of work done on the property. If you want to also sell the property later, the costs of not being permitted could come back to haunt you when the sale of the property doesn't go down.

I don't think it can enhance the properties worth, but it can enhance your budget so that you're not stuck paying fines or other fees associated with not being permitted in the first place.

 

[Jeanette P]

I'm not sure that it would improve the value of the property. Essentially, the property will hold it's value by permitting all work. Unpermitted work can cause issues in the future. If the house is sold the new owner would take responsibility for the unpermitted work and be subjected to obtaining permits and possibly be invoiced for extra fees for work done with out a permit.

 

[EFlynn]

What's your opinion on this subject? I've read that pulling the proper permits, and being able to show that you've done so, improves the property's value on the market. I'm not sure that I agree with that, and no data was offered to suggest that it's true. I think building upgrades, or perhaps even a perfect home inspection, elevate a property's value, but I doubt most buyers consider building permits in their assessment.

Building permits absolutely have value. Most banks won't finance a property with unpermitted work. For instance replacement windows & doors, new roof or new electrical & plumbing, all those things typically require permits because there are building codes to adhere to. A permit assures the financial institution that work was done to code and is considered safe. Here in Florida those things done without can bring fines to the homeowner until corrections are made. Simple stuff like replacing kitchen cabinets & counters does not require permits because you aren't relocating any MEP's.

 

[s d brown]

I agree with Eric. Logically, I don't see that permits have any effect on increasing the value of the property. However, the lack thereof might cause the property price to decrease, should you want to sell it at some point.

I agree that permits do not increase property value but i do think that is great when you are doing work on your home, you should acquire the proper permits if necessary

 

[Winny]

For peace of mind it's good to have everything be permitted with your property. But I don't think it increases the value of your property in any way.

But, if you have done any work that happened to be unpermitted, it might end up costing you when you do attempt to sell. So if any work is done, make sure it's all permitted and you should be good. It may not increase the value of your property, but it'll certainly make it safe to sell.

 

[kevboe]

i am a building inspector and plans examiner for a municipality here in Washington. I think Eric has it correct. Building permits don't increase value. they are an administrative element in the bigger picture of the home. it is correct work without permits may cause a negotiation point in the purchase. this unpermitted work must be obvious because no seller is going to point it out. many elements of the home can be improved without anyone realizing a permit was never pulled. how do you know the window are new? or the deck was added to a few years back? visually it might not be obvious and wading through the permits (all have to be requested through a public information request) could be a huge undertaking. It is the work done that adds the value, there is no monetary value on the permitting. A bathroom brings a specific dollar value when one is added or remodeled. However, the permit itself has no monetary value it's just an element that must be in place to realize the value of the bathroom... Just Sayin

 

[BobaChewie]

I do not believe permits increase property value but it is great to be transparent about whether permitted work was done in the home. Many times I would come across home owners being under the stress and costing hundreds, if not thousands, in comply orders due to the owner not knowing work was done in the home they've bought.

 

[Jake]

i am a building inspector and plans examiner for a municipality here in Washington. I think Eric has it correct. Building permits don't increase value. they are an administrative element in the bigger picture of the home. it is correct work without permits may cause a negotiation point in the purchase. this unpermitted work must be obvious because no seller is going to point it out. many elements of the home can be improved without anyone realizing a permit was never pulled. how do you know the window are new? or the deck was added to a few years back? visually it might not be obvious and wading through the permits (all have to be requested through a public information request) could be a huge undertaking. It is the work done that adds the value, there is no monetary value on the permitting. A bathroom brings a specific dollar value when one is added or remodeled. However, the permit itself has no monetary value it's just an element that must be in place to realize the value of the bathroom... Just Sayin

Great points. I agree with Eric on this too. And totally, the remodel itself is what helps bring in a better estimate. Having a permit will help, but you are right, some of that work could have been done unpermitted perfectly fine and no one might ever find out.

 

[Elissa B]

In my jurisdiction, we have noticed that when people sell their homes, the real estate agents want proof that things have been permitted, down to new hot water heaters. Agents will even submit public records requests to make sure everything has been permitted before listing. I guess in this instance, it does help with properties because they aren't selling without proof of permits.

 

[luckyj76]

I agree with Eric. Logically, I don't see that permits have any effect on increasing the value of the property. However, the lack thereof might cause the property price to decrease, should you want to sell it at some point.

I also agree with the statements above. From a homebuyer's perspective, it would give me piece of mind knowing that the work was done by a licensed contractor vs another home that may just be remodeled by DIY'ers... Peace of mind=higher value to me for this type of investment.

 

[shwhite]

Having work permitted wouldn't necessarily increase your property value but it will help maintain the property value, especially when buying and selling. For instance, most insurance companies are currently looking for older homes in Florida to have roofs replaced and permitted within the last 10 years for lower insurance premiums. In another aspect, if a pool, shed or addition is done without proper permits and inspections then you will run into possible fines, issues with home inspections, insurance coverage or a sale of the home. All in all, permitting work being done is necessary but does not collectively increase your property value.

 

[Chris_Sows_32]

I believe they do enhance a property’s value but it depends on the type of permit. If the permit for example, is of a remodeling sense then yes it would greatly increase the value. However if it is a permit regarding a deletion of a part of the property in order to greatly improve building standard, then no. The property market overall values additions and remodels more than for example, downsizing to make it more appropriate to code.

 

[Jake]

I also agree with the statements above. From a homebuyer's perspective, it would give me piece of mind knowing that the work was done by a licensed contractor vs another home that may just be remodeled by DIY'ers... Peace of mind=higher value to me for this type of investment.

Yeah that makes perfect sense. Having it all done under the rules and by the book would provide piece of mind for just about anyone in the situation. That's a good point.

In my jurisdiction, we have noticed that when people sell their homes, the real estate agents want proof that things have been permitted, down to new hot water heaters. Agents will even submit public records requests to make sure everything has been permitted before listing. I guess in this instance, it does help with properties because they aren't selling without proof of permits.

I think it's like that where I live too. No matter what, they will need that proof before anything can be done.