What Happens If My Grand Rapids Home Has Unpermitted Work?
Selling your Grand Rapids home can be challenging enough, but discovering—or realizing you have—unpermitted work adds another layer of complexity. Whether it’s a finished basement, an added bathroom, or a deck built without the city’s stamp of approval, unpermitted improvements can create hurdles for your listing, your timeline, and your net proceeds.
As a seller, you want clarity on what’s required, how this impacts your bottom line, and what options you realistically have before you hit the market. Let’s break down what happens if your Grand Rapids home has unpermitted work and how you can navigate it without unnecessary headaches.
Quick Answer
If your Grand Rapids home has unpermitted work, you’re required to disclose it. Unpermitted improvements can reduce buyer confidence, complicate appraisals, or even cause sales to fall through if lenders or insurers raise red flags. Most sellers face a choice: address the permitting before listing, price accordingly and disclose, or offer incentives to keep the deal moving.
No two scenarios are identical, but ignoring the issue rarely works out. If you’re dealing with this, I’m happy to walk through it with you.
Strategy #1: Pricing for Unpermitted Work
When your Grand Rapids home includes unpermitted improvements, pricing becomes a more nuanced calculation. The market may not assign full value to unpermitted spaces, especially if buyers or their lenders can’t be certain the work is safe or up to code. Appraisers often discount the value of finished basements, bedrooms, or additions that don’t have a clear permit history, per NAR guidance.
Jason’s take: “I’ve seen sellers try to price as if the extra bathroom or finished basement is fully permitted, only to lose buyers once the issue comes up. It’s usually better to price with the expectation that not every buyer will see value in the unpermitted space. This often means pricing slightly below recent comps with all-permitted features, but not giving away the house either.”
Strategy #2: Disclosure and Positioning
Michigan law requires you to disclose any known unpermitted work on your Seller’s Disclosure Statement (source). Trying to hide the issue is not only unethical but could create significant legal liability after closing. Instead, be upfront and provide as much documentation as possible, even if you’re missing permits. This helps buyers—and their lenders—assess risk and make informed decisions.
Jason’s take: “I advise sellers to gather any blueprints, invoices, or correspondence with contractors, even if permits were never pulled. A clear paper trail and honest disclosure can keep more buyers in the mix and reduce renegotiation after inspection.”
Strategy #3: Deciding Whether to Permit or Sell As-Is
You have options: retroactively permit the work (which can involve opening up walls, inspections, and new costs), or sell the home as-is and negotiate with buyers. Retroactive permitting can be time-consuming and isn’t always possible, depending on the scope and the city’s process (Fannie Mae guidelines). If the listing isn’t generating activity, it might be worth pursuing the permits to widen your buyer pool, especially for homes in higher price ranges.
Selling as-is is often faster, but may require a price concession or seller credit to offset buyer risk. Your decision should be based on your timeline, market response, and the cost/benefit of permitting.
Strategy #4: Negotiation and Offer Terms
If the market is responding—meaning you’re getting showings or offers—you’ll likely encounter requests for concessions, credits, or repairs tied to the unpermitted work. Some buyers’ lenders may refuse to fund homes with certain unpermitted spaces, especially if they affect safety or square footage. A strong offer from a cash buyer or a buyer with flexible financing might be your best bet.
Be prepared to negotiate on price, provide additional inspections, or agree to escrow funds for post-closing permitting. If the listing isn’t generating activity, consider adjusting your negotiation stance or offering an upfront credit.
Real Seller Case Study
A Grand Rapids seller I worked with had finished their basement years before listing but never pulled permits. When we listed, we disclosed this up front and priced accordingly. The home attracted plenty of interest, but several buyers hesitated due to the permitting issue. After two weeks with limited offers, the seller decided to meet with the city and start the retroactive permitting process for the main electrical and plumbing. With the paperwork underway, we updated the listing and immediately saw renewed interest. Ultimately, the home sold to a buyer with conventional financing after the city inspector signed off on the major systems.
Grand Rapids Market Insight
In the Grand Rapids market, unpermitted work is more common than most sellers realize—especially in older neighborhoods where DIY projects abound. Sellers who address the issue proactively, either through disclosure or corrective action, tend to experience fewer surprises during inspection and closing, and often secure stronger offers than those who wait for problems to surface.
Frequently Asked Questions About Selling in Grand Rapids
- Can I list my Grand Rapids home if it has unpermitted work?
Yes, but you must disclose it and be prepared for it to impact value and negotiations. - Will unpermitted work stop my sale from closing?
It can, especially if lenders or insurers raise concerns. Being proactive reduces this risk. - Should I fix the unpermitted work before selling?
It depends on your timeline and budget. Sometimes retroactive permitting pays off, but not always. - How do appraisers treat unpermitted spaces?
Appraisers often exclude unpermitted square footage or improvements from the value, affecting your appraisal and proceeds.
Related Resources
- Grand Rapids Seller Disclosure: What You Must Reveal
- Home Inspection Guide for Grand Rapids Sellers
- Can I Sell My Grand Rapids Home As-Is?
About the Author
Jason Pohlonski
is a Michigan licensed real estate salesperson with Keller Williams Grand Rapids East. He helps buyers and sellers throughout Grand Rapids, East Grand Rapids, Forest Hills, Ada, Byron Center, Jenison, Cascade, and surrounding West Michigan communities.
Jason began his real estate career in Chicago in 2004, later expanding his experience in Ann Arbor from 2014 to 2019, and has been serving clients in the Grand Rapids area since 2019.
With over 20 years of combined real estate experience across multiple markets, Jason focuses on helping clients make clear real estate decisions involving pricing, offer terms, inspections, appraisals, relocation timing, and buy-sell planning.
Industry Recognition
Jason is recognized by platforms and industry organizations including Zillow, Grand Rapids Magazine Real Estate All-Stars, and Real Producers for his work serving West Michigan buyers and sellers.
Jason also supports One More Moment, a nonprofit that grants wishes to late-stage cancer patients, by donating $100 for every successful closing.
Professional Disclosure
Jason Pohlonski
Michigan Licensed Real Estate Salesperson
License Verification: Verify Michigan License #6501386166
Brokerage: Keller Williams Grand Rapids East
Brokerage Office: 1555 Arboretum Dr. SE, Grand Rapids, MI 49546
📱 Call or text: 616-916-9770
📅 Schedule consultation:
https://calendly.com/pohlonskirealestate/30min
📧 Email: jpohlonski@kw.com
This article reflects real client experiences and market conditions in Grand Rapids and surrounding communities at the time of publication. Real estate outcomes can vary depending on market conditions, property characteristics, buyer demand, financing terms, inspection results, appraisal results, and lender requirements.
This article is for general informational purposes only and is not legal, tax, financial, insurance, engineering, inspection, or floodplain determination advice. Buyers and sellers should consult qualified professionals before making decisions involving financing, insurance, inspections, taxes, legal issues, or property risk.
