Bidding on a house which has living space/square footage addition not recorded at the county


#1

A property in Irvine, Orange County, CA built in the 1970’s, had about 1000sqf of living space originally. Previous owner added another 1000sqf in the early 2000’s. The county’s record still shows the property as a 1000sqf building. A few questions.

  1. Does this mean the added living space was not done with the proper permits? Given Irvine’s reputation, it is hard to imagine such a large build-out project could be completed without permits within its city limits.
  2. Will the unrecorded living space square footage cause problem in appraisal value when I resale?
  3. As a novice auction investor, how should I value the property’s added square footage?
  4. Is such property for veteran investors only due to the potential for surprise repair costs?

#2

When you say “County” records - do you really mean the City of Irvine Bldg. Dept. Records?


#3

Thanks miket, I found the permit at Irvine’s office of records & info, as you suggested. The permit did reveal that the addition was only about 800sqf, not 1000sqf as claimed by the owner’s agent, which I can understand.
I would greatly appreciate any other inputs you might have on value and repairs, or sharing your experiences in dealing with build-out houses.


#4

Just to clarify, when I said county’s records I was being sloppy. I assumed the square footage data from various online sources such as Realtor.com Redfin.com which provide information from public records as the records from Orange County clerk-recorder.


#5

Go to the County Assessor’s office and look up the property details. The assessor will usually pickup the improvment from the City building permit and have added the value of the improvement to the tax roll for the property. I have found that realist and other sources are often not consistent with the public record.


#6

Finding hidden value is a great strategy. If you have information about the property that is different from the public record it could be an advantage. If the addition is legal and has been finaled, etc, then it does have added value. You are correct to be cautious. Un-permited construction can be an expensive problem to fix. I purchased a property at auction and later discovered there was a “cabin” that was not obvious by the records. We managed to get it legalized and it added significant value to the property. Determining valuation of any property in this market is a challenge.


#7

Thanks richard, If you don’t mind would you please share your experiences in the workmanship/quality aspect of the added constructions? Do they tend to have leaky roofs? Less structural strength, etc.? Anything less than the original master plan builder did?


#8

Floorplans are a very subjective subject. So room additions can be odd space. It sounds like you have seen the building permit, The permit should give you some details of the use of the addition, bedroom, family room, kitchen, etc. If the work was finaled, then it probably meets minimum building code standards. If a contractor was used to do the additiion, there name should be in the record somewhere. You can check them out, how long have they been in business, are they still in business, etc. If the house has been listed in the last 5 years, get a realtor to get you a link to the listing so you can look at the photos. If the addition was permited and the permit was finaled, then there is added value. Even storage has value. Sq footage matters.