Selling a House with Code Violations In SF Bay Area
So you’re looking to sell your property. You may be wondering if it meets all the regulations. It can be tough to find a buyer if your property doesn’t comply with building codes.
In many areas, it’s illegal to hide code issues from potential buyers. Not revealing them could lead to lawsuits down the line, so it’s important to know where you stand.
Consider hiring a home inspector to assess your property and identify any problems. If there are code violations, don’t worry. It doesn’t mean you can’t sell. There are plenty of ways to handle it and still get your property on the market.
What is a Code Violation?
A code violation means that a property has fallen short of a municipal or county building code.
Building codes are standards set by local/state/federal authorities that control how commercial and residential buildings are designed and built to make sure people stay healthy, safe, and okay.
Breaking a rule may sound scary at first. It can sometimes slow down or stop a sale because most buyers want a place they can move into right away.
But breaking a rule doesn’t always mean the building is dangerous or needs to be destroyed. Sometimes, you may get in trouble just for not cutting the grass. In old or handed-down buildings, it may just mean they’re not up to date.
You should know that building rules often change, so what was okay before might not be okay now. Only city hall people can say if a building follows the rules, and because the rules change a lot, it can be tough to keep up.
What are Examples of Common Code Violations?
Building code violations are more common than you think.
According to the Common Code Noncompliance Survey Report from the National Association of Home Builders (NAHB), violations related to fire safety (53%), structural integrity (50%), and accessibility (38%) are on the rise. NAHB also discovered that up to 60% of newly built homes fail to meet code requirements.
Homeowners often unintentionally break codes during renovations by not obtaining permits or using inappropriate materials.
Violations of Building Codes include
- Incorrect smoke alarm placement – smoke alarms must be placed outside each bedroom
- Missing carbon monoxide or smoke alarms
- Missing GFCI outlets – these must be used within 6 feet of any water source to prevent electrocution accidents
- Use of polybutylene piping – it was found that this reacts with the chlorine in the water, causing micro-fractures which lead to pipes bursting thereby causing flooding and water damage
- Missing expansion tank for water heaters – an expansion tank prevents excessive water pressure from building up due to the natural expansion of water as it is heated
- Handrails without returns – to avoid snagging sleeves and straps, handrails must end by turning into a wall
- Improper flashing of windows and doors leading to water damage and moisture ingress
- Exhaust fans venting into the attic instead of outside the house
- Zoning ordinance violation
- Conversion of garage into a living space
Can you Sell a House with Code Violations?
The short answer is YES, absolutely.
When selling a property with code issues, honesty is the best policy. It’s essential to be honest with potential buyers regarding any issues uncovered during inspections.
The upside is, that even with violations, your property may still fetch a decent price, especially considering the current upward trend in home values reported by Forbes, which is expected to continue.
Even if you have to invest in repairs, it’s worth it. Addressing these issues will enhance your property’s value and enable you to maximize your returns.
What are Code Violations that Require Repairs?
Usually, these are code violations that are also safety issues such as the following:
Electrical or Plumbing Issues
The electrical and plumbing systems in older properties may be outdated, needing updates before putting the house on the market to ensure safety for the buyer. Also, lenders usually won’t give a loan if there are any code violations.
Structural Issue
Damage to the structure like cracks in foundations, ceilings that droop, or walls in the basement that bend might be due to natural events like floods or earthquakes. If so, you may qualify for help fixing your home from FEMA.
Pest Control Issue
Pest infestation can cause health problems and are a serious code violation. The seller must first clear the pests from the property before putting it up for sale. The aforementioned code violations can be costly to address and need professional help. You must consider your financial situation and if you need to borrow money for the repair work, calculate if you’ll be able to make it back from the sale.
What are my Options when my Property has Code Violations?
You have three options in dealing with code violations when selling your home: fix it, lower the selling price so the buyer can fix it, or sell it as is.
1. Fix the Code Violations
When choosing what to do, think about what worries buyers most: getting loans and insurance. Mortgage lenders often demand sellers to address problems before closing. Local rules say sellers must fix violations to dodge penalties.
So, if you aim for a top dollar, this is your best move.
Certain violations are just surface-level and cheap to fix. These include clearing out a disused pool, asbestos removal, touching up paint, and basic landscaping.
Serious problems, like plumbing issues or structural damage, may cost more and take longer to fix. If you have neither the funds nor the time to undertake these repairs, you can consider other options.
2. Lower the Asking Price so the Buyer can Fix the Property
If you don’t want to handle repairs, you can drop the price to offset the buyer’s repair expenses. Whether they’ll buy depends on the code issues. Serious problems like electrical or fire hazards might make them back out. Some might negotiate hard for a lower price to cover repairs, and it’s your call if you agree to sell.
3. Sell your Home As Is to a Cash Buyer
If you can’t afford fixes or can’t find a buyer to do them, consider a real estate investor or house flipper. They buy homes as is, especially distressed ones. Plus, they often pay cash, making for a speedy sale. With a cash buyer, you skip agent commissions, leaving you free to move on with the cash from the sale.
Tips for Selling a House with Code Violations
- Be honest. Disclose flaws and code violations if selling your house as is.
- It is not necessary to fix every little thing such as those that come from normal wear and tear, but fixing the smaller violations would show the buyer that you care about the property and are willing to meet them halfway in closing the deal.
- Ideally, you want to make your house presentable as much as possible. Nothing turns off buyers more than a dirty and unkempt house. Mow the lawn, eliminate clutter, and touch up that peeling paint–before you take buyers on a tour.
- If your house has multiple code violations, finding a cash buyer is your best bet if you want to sell it quickly.
Closing thoughts: Selling a House with Code Violations in SF Bay Area
Selling a house with code violations isn’t as difficult as you think.
There are many options open to you, and here at We Buy Houses in SF Bay Area, we’re here to guide you and make a decent cash offer. We purchase properties in any condition, including those with code violations!
We’ll streamline the process for you. No need to hassle with real estate agents and their charges. We’ll even handle all the closing expenses!
So, what are you waiting for?
Fill out the form below if you want to sell your house quickly without the hassles of a traditional home sale. If you have any questions, don’t hesitate to get in touch with us at (408) 557-7554.
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Author: Saini
My name is Saini, and I founded the We Buy Houses in SF Bay Area team with years of experience in the real estate industry. I have assisted numerous sellers in selling their homes quickly, “AS-IS”, and for a fair price.
He’s been featured in multiple publications including Yahoo Finance, GoBankingRates, LegalZoom, The Mortgage Report, Apartment Therapy, US News and World Report, and SuperMoney among others.