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  • Writer's pictureDaniel Rangel

Buyers and Sellers Lose Tons of Money in Real Estate due to Unpermitted Structures

Updated: Aug 24, 2019

Every year, without knowing, buyers and sellers of real estate lose money due to not properly verifying permitted square footage. It’s not that they don’t look; it’s that they look in the wrong place.

A huge mistake, even among real estate agents, is to rely on tax records, as published by the County Assessor’s Office. This is understandable. It’s the most easily accessible and most commonly used source. It’s the same place that the big, consumer-based real estate websites turn to. Many figure that because these records come from the government, they are official and, therefore, accurate.

But it is not the county assessor’s job to verify what is permitted or not. Tax records are for tax purposes. For this reason, it is not uncommon for there to be discrepancies between what tax records note and what is actually permitted.

The recommended starting point for verifying what is and what is not permitted on a structure is the building and safety department(s) of your city.

I recently took a listing. The tax records showed 2,000 sq. ft. After a visit to the city’s building and safety department, I found out the property was 2,350 sq. ft. It had an addition that was not captured by the tax records. At $400 per square foot, this is huge, $140,000 huge! To rely on the tax records alone would have been a big loss to the sellers, who were not aware of this.

Verifying permits is equally important for buyers. Buyers who rely solely on tax records could end up overpaying, buying square footage that is not permitted and therefore has no market value.

Buyers and sellers, check those permits! Don’t rely on tax records; they weren’t created for this. Turn to the building and safety department of your city. An experienced realtor will be able to guide you through this process, preventing you from overpaying or underselling.




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