Michigan situation guide · Updated November 2026

Wholesaling Houses With Unpermitted Work in Michigan

Wholesaling houses with unpermitted work in Michigan means contracting on a home where a deck, finished basement, addition or electrical job went in without a city permit, then assigning that contract to a buyer who accepts the risk. These houses scare retail buyers and lenders, so owners often take a discount. In Grand Rapids and Kent County, the right buyer can turn that fear into a fee for you. Learn how to price one with our repair cost guide.

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The short answer

Can you assign a contract on a home with unpermitted work?

Generally yes, if the contract is assignable and everyone knows about the work. Tell your buyer what you found, and check the local permit file.

Unpermitted work is a condition problem, not a ban on selling. Michigan’s statutory seller disclosure form, found at MCL 565.957, asks about unpermitted structural work and several other conditions. A seller who skips that form can give the buyer a right to terminate, so be careful with who delivers it. See our due diligence guide for a checklist.

Municipalities may add their own disclosure rules, and a city can ask for permits or inspections when work is found. A buyer may need a permit after the fact, which can mean opening walls. Our certificate of occupancy guide and code violation leads guide explain how that tends to work.

Houses With Unpermitted Work in Michigan at a glance

Disclosure	Statutory form asks about unpermitted structural work
Buyer remedy	Missing disclosure can let a buyer terminate
Local rules	Cities may add disclosure or inspection steps
Lender view	Many lenders and appraisers dislike open permits
Best buyers	Cash investors who can pull permits
License	No wholesaler license found; check broker rules

The opportunity

Why these houses sell at a discount

Most buyers cannot get a mortgage on a house with an open permit or an obvious unpermitted addition. Appraisers may leave out the finished square footage, and inspectors write it up. That scares retail buyers away, and owners find their listings sit. In a strong market like Grand Rapids, where good homes sell fast, a house with a basement bath nobody permitted can look like a problem for months. An investor who knows the local permit office can fix it or live with it, and that is your buyer.

Motivated owners

Sellers who learn about the problem after an inspection often want a clean exit. Try our motivated seller guide.

Lower prices

The discount can leave room for a fee and still let your buyer profit. Check it with the ARV guide.

Less competition

Many investors skip these houses. See our wholetailing guide for another exit.

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Lead sources

Where to find these leads in Michigan

Failed inspections. Listings that went pending and then came back on the market may have had a problem. See expired listings.
Code enforcement. City violation lists can show open work or stop-work orders. Use our code violation guide.
Permit records. Local permit portals show finished basements or garages with no permit on file.
Landlords. Rental owners who converted units may know a city inspector is next.
Agent referrals. Agents often hear about a problem home they cannot list.

Your exit

Who buys houses with unpermitted work in Michigan

Cash investors, contractors and small landlords are the usual buyers. They can pull permits, hire a licensed trade and absorb a delay. Most will want a price that reflects that work.

Be honest about what you saw and what you do not know. Give buyers the permit search you did and the photos. A clear inspection contingency can protect you, and our title company guide helps you find a closer who will not panic.

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Step by step

How to start wholesaling houses with unpermitted work in Michigan

Ask about work done. Find out what changed, who did it and when.
Check the city file. Call the building department or search its portal for permits and open cases.
Walk the house. Look at wiring, panels, plumbing, stairs and anything built into the original footprint.
Price the fix. Use the ARV calculator and MAO calculator, with a contractor quote for permits and repairs.
Write the contract. Use assignable language and clear disclosure. See assignment of contract.
Sell to a cash buyer. Share the permit search with your buyers. A cash buyer list speeds this up.
Close and document. Keep copies of every disclosure and message for your records.

Your checklist for wholesaling Houses With Unpermitted Work in Michigan

Search the city permit portal for the address before you sign.
Ask the seller to complete the statutory disclosure form if it applies.
Photograph panels, additions and any exposed wiring.
Get a contractor estimate for permit and repair costs.
Tell buyers in writing what you found and what is unknown.

A Michigan example: a Grand Rapids bungalow with a finished basement

Seller ask	$232,000
Contract price	$188,000
Permit and repair estimate	$21,000
Estimated value after repair	$262,000
Buyer price	$201,000
Assignment fee	$13,000

A Grand Rapids landlord in the Creston area had finished the basement himself, adding a bedroom and a bath. A buyer’s inspector found the work during a retail sale, and the buyer left. The landlord relisted at $232,000 and got no offers for weeks.

A wholesaler called after a letter. She checked the city permit portal, found nothing for the basement, and got a contractor to estimate $21,000 for permits and fixes. She signed at $188,000 and sent a clear note to her buyers.

An investor who rehabs in Kent County paid $201,000 and pulled the permits himself. The wholesaler kept a $13,000 fee, and the landlord was glad to be done.

Michigan rules to know

Disclosure, permits and what to tell buyers

The statutory seller disclosure form in MCL 565.957 asks about unpermitted structural work, flooding and drainage, and other conditions. The Seller Disclosure Act, starting at MCL 565.951, has exemptions that can include foreclosure sales and some estate sellers, and MCL 565.959 lets a city or county require added disclosure. Even where the form is not required, fraud and misrepresentation can still apply, so give buyers what you know.

Michigan broker law, including MCL 339.2501, can reach people who buy and sell as a principal vocation. If you do many deals, talk to an attorney. Our attorney guide explains what to ask. Also tell your buyer that permits, inspections and fees vary by city, and tell your seller you may assign the contract.

Learn it with a mentor

Price risk before you sign

Permit problems can be cheap or expensive. Mentorship students send us photos and permit searches, and we help them judge the risk before they commit.

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FAQ

Houses With Unpermitted Work in Michigan: common questions

Is wholesaling houses with unpermitted work in Michigan legal?

Generally yes, with no wholesaler license found, but disclosure and broker rules can apply. Get legal advice. Unpermitted work is a condition problem, not a ban on selling, so tell your buyer what you found and check the local permit file.

Does Michigan require a disclosure for unpermitted work?

The statutory form asks about it for covered sales, and some sellers are exempt. Check the current form. A seller who skips that form can give the buyer a right to terminate, so be careful about who delivers it and when.

Can a buyer pull permits afterward?

Often, but cities differ. Inspectors may require open walls or changes. A municipality can ask for permits or inspections when work is found and may add its own disclosure rules, so check the local permit file before you give a buyer any repair estimate.

Will an FHA or conventional lender finance these houses?

Many lenders resist open permits or unpermitted additions, so cash buyers are the usual fit. Tell your buyer what you found up front, because a buyer who learns about the work late may walk away or demand a bigger discount.

Who pays for permits?

It is negotiated. Most wholesale buyers take the house as-is and price the permit cost into their offer. Say what you know about the work in writing, and let the buyer check the permit file before they commit, so nothing surprises anyone at closing.