Recently Livonia, Mich. became a leading market for real estate. If you live in the city, this is a great time to sell your home. However, you might worry about its condition and how you will prepare to sell it. One common question is whether your house needs to be up to code first.
Stop holding your breath, because your house does not legally need to be up to code to sell. Chances are it’s far from full compliance. You’re not alone, as most houses are in violation of several codes. If they all had to be up to code, no homes would sell.
Homes in violation are often grandfathered in from past standards, meaning they were up to code back when they were built but better codes exist now.
Codes vary by location, so the City of Livonia establishes its standards through consideration of local needs, such as climate and population.
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If grandfathered code violations aren’t actively creating problems — like causing a nuisance or danger to others — you shouldn’t run into problems from insurance companies or home inspectors (they don’t enforce codes like city inspectors).
Understand how code violations can affect the home sales process, including:
- Knowing Buyers’ Perspectives Before Selling Your Home
- Understanding Local Regulations
- Meeting Codes to Prepare Your House for Sale
Knowing Buyers’ Perspectives Before Selling Your Home
Besides learning about local codes, you should also consider a prospective buyers’ perspective of your home. Depending on the buyer’s concerns, you have the following options with selling your house
- Agree to make requested updates
- Provide funding for the buyer to make updates themselves
- Refuse to make updates, which could lead you to sell the home “as is” to a cash buyer
Your approach to each of these options can affect the price of your home.
You can prepare for the selling process by understanding the violations you have. Livonia’s Inspection (Building and Enforcement) Department can provide specific codes meant for safety and efficiency.
Understanding Local Regulations
The city’s inspection department reviews and approves plans, issue permits and does inspections for additions, alterations, and new construction.
This includes work such as
- Fire prevention
- Zoning compliance
If it’s worth getting your house up to code, you or your contractor will need to request permits for the work you plan to do. Then a city inspector will come to your home to evaluate the work, sometimes while it’s in progress and always after it’s completed.
You pay a fee, which varies for each permit. If you work with a contractor, they might request permits from the city directly, but you’ll want to confirm permits have been pulled as it isn’t a requirement.
Having permits protects you from fines from the city and liability for issues with the work.
Despite the risks, people still complete new projects without permits and in violation of codes. This can cause a loss of value in the home, as the buyer might require funding to correct your work or you could be liable for issues that arise. Avoid this by keeping renovations to a minimum or checking with your city government before beginning in-depth work.
If code violations and permit fines are a concern, and you don’t have time or money to fix them, you can skip the work and sell your house as is. This means you’ll likely need to drop the price and the buyer will take the risk on the home’s condition.
Meeting State Requirements
Although code violations can be excused, it’s required in Michigan that you file a Seller’s Disclosure Statement for the buyer, to describe the property’s condition.
In the statement, you disclose what is included with the purchase of the home along with the condition of each item. It also asks for condition of the property, related to leaks, damage or pests, among other things. Complete honesty is needed on the statement as it’s a legally binding document and can bring a lawsuit if the information is false or undisclosed.
Meeting Codes to Prepare Your House for Sale
With homes that are grandfathered into outdated codes, you aren’t required to make updates unless you alter the home in specific ways.
For example, in most cases, you don’t interfere with codes when replacing a faucet, as it involves connecting to existing plumbing without altering the built-in aspects. If you instead move the sink to another location, you get involved with the basic piping of the house behind walls, and so it is advised to follow codes for updating those appropriately.
This factors into renovation decisions you make before selling your home. Can the bathroom be sufficiently improved by replacing the faucet, instead of moving the sink to another wall?
Deciding if Home Renovations are Needed
If you decide you can get more value from your home by renovating before selling it, focus on renovations that improve the safety, functionality and efficiency of your home.
Look into comparable homes near you that sold recently to understand the features that make them appealing. Keep in mind that upgrades might not require permits but major add-ons could involve meeting multiple new codes. To be safe, contact the city’s inspection department to confirm before starting work.
Now you’re empowered with knowledge of how the physical condition of your home can affect its value when you sell it.
View the condition of your home through the lenses of potential buyers, local regulations and the current market. These factors can be used to determine if you have enough time and money to make updates without missing out on this excellent market.
This quick questionnaire will help connect you to a Bolt & Beam expert who can get you introduced to the instant cash offer process:
Realtor.com’s list of hot zip codes includes Livonia, Mich.
Nolo gives points to consider when selling your house in a hot market
U.S. News gives further answers to code violations questions
Search the city’s Code of Ordinances
National Center for Healthy Housing lists resources for finding more code information