Real Estate Today

The devil is in the details

A picture might be worth a thousand words, but when buying a home it is not enough. Today, just about everyone’s first stop in the search for a home is the Internet. It is important to remember photos online do not tell all.

In addition to local buyers, the San Francisco real estate market has many buyers who live out of the city, and their main method of searching for a home is to look online. These buyers live across a bridge, in another state, or on the other side of the world. I am quite sure I am not the only agent who is working with one or more of these long-distance buyers to purchase a home.

An out-of-town buyer looking at a home in the Inner Sunset e-mailed to let me know he found an interesting property online. Reading the information in the listing, I thought this was not “the one”; but thinking positively, I took a look in person. A visit to the home brought to mind all the reasons why buyers or their agents need to look at a property closely and read the disclosure in detail.

What did I find? The kitchen and bathroom were quite nice and typical of an upscale renovation in the Sunset. The catch is the work was done without a permit.

Don’t say, “Oh, that’s in the Sunset.” There are homes all over San Francisco with remodeling work done without permits.

I moved on to the room staged as a baby’s bedroom with a crib. There were lots of windows, but no closet. Probably it just about met the legal definition of a bedroom for size. The trouble was this room was off the kitchen. It was the original laundry room complete with an ironing board in the wall. This was a strange location for a baby’s room, down the hall from the main bedroom and behind the kitchen. Buyers are desperate for bedrooms, but this felt more like an office or breakfast room.

Walking down an internal staircase, I found the washer and dryer. The scary part was yet to come when I had to go up one step to a nicely remodeled illegal kitchen that had not more than a six-foot ceiling. This illegal in-law apartment filled more than half of the garage, and without the lights on was quite cave-like. Plus it smelled like a basement that had not been aired out for some time.

I walked away from this home thinking, Wow! This home is a perfect example of what a cautious buyer does not want to buy.

Reading the disclosure, I found a detailed document prepared by the seller’s agent noting the work done without permit and the illegal status of the in-law apartment carved out of the garage. The sellers and their agent wanted to make sure that the buyers had acknowledged and accepted both the illegal work done on the home and the illegal status of the in-law apartment.

At this point, several questions come up.

Why would a seller want to do work without a permit? The answer is to save money and time. When a contractor takes out a permit, he or she needs to tell the city the cost of the improvement and pay for the permit based on the cost of the job. This cost is tacked on to an owner’s tax basis, and the taxes immediately go up. Buyers know they will save money on taxes if they buy the home for less that has work done without city permits. In San Francisco it takes longer and costs more to get a building permit than in any other city in the country.

Why should I care if the work was permitted? Contractors can take shortcuts that no one can see once the wall is closed up. There is no way to know if the job has been done to meet city codes if the work has not been inspected by the city.

Why would people buy a home with both an illegal in-law apartment and work done without a permit? There could be a number of reasons, including: They don’t want to deal with a remodel and they need an apartment downstairs; the apartment will rent for top dollar, even with a six-foot ceiling, and help defer the cost of their home; they need an apartment for their parents or a caregiver who will help with their children; or they only have so much money and are willing to take a chance.

Unwarranted and illegal works run the gamut of a kitchen sink and cabinets added in rooms downstairs that are otherwise fully permitted and warranted, to major remodels where the electrical and plumbing have been moved around the house.

The moral to this story: When you find a home online that looks like the one for you, in your excitement, do not let fresh paint and a remodeled kitchen and bath keep you from doing your due diligence.

In San Francisco, a limited housing inventory is expected to continue for some time, and many buyers make non-contingent offers. It is more important than ever to closely investigate the work done on a home and thoroughly read the disclosures. When you have questions, ask your agent. Your agent’s job is to interpret the seemingly unending documents that are the bible of a home purchase.

Send to a Friend Print
Carole Isaacs is a Realtor with McGuire Real Estate, where she is a Top Producer. Follow her on Twitter @CaroleIsaacs or visit her online at or call 415-608-1267.