Selling a House with Code Violations
So you want to put your house up for sale. You may be wondering whether it is “up to code”. Finding a buyer can be challenging if your house is found to be non-compliant of building codes.
In many states, it is unlawful not to disclose code violations to potential buyers. Failure to do so would open yourself up to the possibility of lawsuits in the future, and therefore, it is crucial to find out for sure.
You can hire a home inspector to find out where you stand and discover exactly what your house needs. If you find code violations, don’t panic. It doesn’t mean that you won’t be able to sell your house. In fact, there are a lot of options available to you on how you want to proceed with putting your property into the open 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 govern the design and construction of commercial and residential structures to ensure the health, safety, and general welfare of the public.
A code violation may sound scary at first. It can sometimes impede the selling or halt it altogether as most buyers prefer a property where they can move in immediately.
However, having a code violation doesn’t automatically mean that the property is deemed unsafe or it has to be condemned. Sometimes, you can be given a violation notice for simply failing to mow the lawn. In old or inherited properties, it may just mean out-of-date standards.
You should know that building codes are often revised, and what was up to code before may no longer be up to the current code. Anyway, the only ones who can call a property up to code are city hall officials, and due to the frequent revision of building codes, it can be hard to keep up.
What are Examples of Common Code Violations?
Building code violations are more common than you think.
As a matter of fact, according to the Common Code Noncompliance Survey Report by the National Association of Home Builders (NAHB), there is an increasing trend of code violations such as those related to: fire hazards (53%), structural concerns (50%), and accessibility issues (38%). Furthermore, NAHB also found that as much as 60% of new construction are not found to be code compliant.
Sometimes, homeowners unknowingly commit code violations themselves when they conduct renovations without the proper permits or with unsuitable 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 leads 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.
In selling a house with code violations, honesty is the best policy. You must be upfront with your potential buyers about any problems you may discover during the home inspection.
The good news is that if the buyer’s demand is high (even with violations), your home won’t sell for much lower especially since, according to Forbes, home prices are on the rise and this upwards trajectory is expected to continue.
Even if you have to shell out money for repairs, you will still come out on top. Furthermore, fixing it will ensure your property will command top dollar.
What are Code Violations that Require Repairs?
Usually, these are code violations that are also safety issues such as the following:
Electrical or Plumbing Issue
Electrical and plumbing systems in older homes are often outdated. They can hardly be left unchanged prior to selling the house as they might pose a danger to the buyer. Additionally, most mortgage lenders won’t approve a loan if there are existing code violations.
Structural damage include cracked and shifted foundations, sagging ceilings, or buckled basement walls which may have been caused by natural disasters such as floods or earthquakes. If this is the case, you can check if you are eligible for home repair assistance through 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
In deciding which option to go with, you must consider that the big concern for the buyer is if they will be able to obtain financing and insurance. Mortgage lenders typically require that the seller fix the issues before closing. Additionally, local codes require that the seller resolve these violations to avoid being slapped with fines.
Therefore, is is the best course of action if you want to get the best price for your house.
Some code violations are merely cosmetic in nature and can easily be fixed with little cash or labor output. These includes draining and cleaning an unused pool, removing asbestos, repainting peeling paint, and doing basic landscaping.
Serious problems, like plumbing issues or structural damage, may cost more and take longer to fix. If you have neither 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 deal with the stress of doing the repair works yourself, you can lower the asking price to compensate the buyer for the repairs they would need to do to bring the house up to code.
Whether or not the buyer would go ahead with the purchase depends on the code violations. Generally, if they think the violations are serious such as electrical or fire hazards, chances are they would walk away from the deal. Others may try to drastically drive the price down as much as they can to cover the repair cost, and it is up to you if you’d be willing to sell.
3. Sell your Home As Is to a Cash Buyer
If you cannot afford the repairs or you are unable to find a buyer willing to fix the property, you can work with a real estate investor or a house flipper who would be willing to purchase your home as is. Some of them specialize in distressed homes and find it even attractive.
What’s more, they usually pay cash, so this is the way to go if you’d like to sell your house quickly.
If you choose to sell your house to a cash buyer, you do not need to pay commissions to a real estate agent. You could then walk away from the sale with a clean slate and use the money to start your life elsewhere.
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, 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
Selling a house with code violations isn’t as difficult as you think.
There are many options open to you, and here at Sell My House Fast, we’d be happy to help point you in the right direction and give you a fair cash offer. We buy houses as is, code violations and all!
We’ll make it as simple as possible for you. You don’t have to deal with real estate agents and their fees. We even cover all closing costs!
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 (844) 207-0788.
Sell My House Fast For Cash!
Author: Andy Kolodgie
Andy Kolodgie is an experienced real estate investor with a network that expands nationwide. As owner of Sell My House Fast, Andy’s goal is to provide home sellers with more options to their real estate problems than a traditional home sale. He’s been featured on multiple publications including Yahoo Finance, MSN, HomeLight, Credit.com, Apartment Therapy, Business.com, LegalZoom, Zolo, and Creditcards.com.