To Sell a House with Code Violations
When you’re trying to sell a house with code violations, you have several issues to contend with. Among them are the following:
- Reducing the number of buyers. Most investors see problems and place a dollar sign on them. With code violations, they see not only the cost of repairs, but the cost of possible inspections and coordination with government officials, if the violations have been recorded.
- Lenders are very sensitive to code violations, meaning you not only lose money for the violation, but the extra time waiting on approvals can really increase selling costs.
- Someone will have to pay for the repairs, and it will always fall back on the seller in a reduced price, actual repair cost, and extra time to communicate and correct. All of these items are expensive.
- Additional time required because the due diligence is neither simple nor process is more complicated
Sellers should walk through the house and address any potential code violations. Selling a house with code violations in California does not have to be difficult, though.
While code violations are a hassle and can be expensive, being proactive always helps. Here are a few things you can do:
- Put up the money for repairs. Call the code enforcement folks and make the list. While the stories are many of city inspectors making life miserable for landlords, we find that being open and up front is usually the best policy. Do not express frustration for them doing their jobs. Here’s where having a good general contractor helps out, because not all solutions require the most expense. As time goes on during the repairs, keep the code enforcement officer in the loop. Most problems occur when there’s doubt as to what you are doing. Covering up work without notice is never a good idea. Examine the cost, and calculate how much you they can get for the house with the repairs. Be careful to not fix what doesn’t really need fixing. Things like landscaping can be much more expensive than simple mowing. Of course, big ticket items like roofs and foundation issues must be addressed, but work smart, knowing when kicking the can down the road is a good idea. And know what repairs will cause an increase in value. Sometimes if a bathtub needs replacing you can do an upgrade for just a little bit more investment. Other fixes are neutral on value. Consult with a professional such as U.S. Direct Home Buyers on what investment in the property will bring the most value. Markets change. Even we are surprised on a regular basis because of rapid changes in taste and behavior of modern house buyers.
- List the property and sell it in “As-Is” condition and adjust the price accordingly.
- Sell the house to a cash buyer who specializes in purchasing problematic real estate.
When you Have Tenants
If you want to sell but have a tenant occupying the property:
Make sure that your tenant knows what’s going on and attends the meeting with the code enforcement officer. You want your tenant to understand the violation and what steps you are taking to correct the deficiencies. Look over your tenant lease agreement to determine what liability, if any, tenant has. A well written lease should require the tenant to maintain the property in accordance with local and state laws. The tenant may be liable to the property owner, as the landlord, but the ultimate responsibility lies with the owner. Some owners mistakenly assume he can pin a lot of costs on the tenant, but courts are notoriously reticent to favor the landlord over the one paying rent. Know your lease and its provisions.
Make sure you keep the local code enforcement officer apprised of your progress. Remember that anything you promise to staff members of the code enforcement office can be used as evidence in a code enforcement hearing, which can obligate you to much higher costs than you planned for.
Selling a house with code violations can be painful. If you have a house with code violations and would rather sell to an investor like U.S. Direct Home Buyers than to go through the hassles of repairs, fill out the form or give us a call! We can get you a cash offer within seven days. No repairs, As-Is, hassle free. Call today!