Wholesaling Houses With Unpermitted Work in Washington

The short answer

Can you wholesale a house with unpermitted work in Washington?

Generally yes. You can assign a contract on such a house as a principal, but you should be honest about what you know and let the buyer decide. A local inspector and the city permit office can tell you what finishing the paperwork would take.

Unpermitted work does not stop a sale. It changes who carries the risk. A buyer may need to apply for a permit after the fact, open walls for inspection, or tear out work that fails. Your job is to find the work, price it, and tell your buyer clearly. Our repair cost guide helps with the pricing.

Washington expects sellers of improved residential property to complete a Form 17 statement under RCW 64.06.020 unless an exemption applies, and that form generally asks about additions and remodels. As the buyer and then the assignor, you may not be the person who completes it, but your end buyer will care. Check which version is in force, since the statute has versions with different effective dates. Read our certificate of occupancy guide for the permit side.

The opportunity

Why unpermitted houses work in Washington

Washington has many older homes with basements finished by owners, garage conversions and add-on rooms. In Spokane and across eastern Washington, long-time owners often did the work themselves decades ago and now want a simple exit. A cash buyer who budgets for the permit and the repairs can still make money. Compare the ARV calculator to the MAO calculator and subtract a real cushion for the permit path.

Lead sources

Where to find unpermitted-work leads in Washington

• Owner mentions. Sellers often tell you about the DIY basement or the added room if you ask about the history of the house.
• Permit history gaps. Compare the assessor record to the home you see. A larger house than the record shows can be a clue.
• Code complaints. Open complaints may show work done without a permit. See our code violation guide.
• Failed listings. Homes that sat on the market may have inspection issues. Try our expired listings guide.
• Older neighborhoods. Drive streets with homes built decades ago and look for added garages, decks and attic rooms.

Your exit

Who buys houses with unpermitted work in Washington

Experienced rehabbers, contractors and landlords are the usual buyers. They can pull permits, hire licensed trades and absorb the cost of inspection. Build your list using our cash buyer guide.

Send each buyer a plain list: what you saw, what you were told, and what you do not know. Our due diligence guide lists what to check.

Step by step

How to start wholesaling houses with unpermitted work in Washington

1. Walk every room. Look for new walls, added outlets, patched floors and finished spaces that look newer than the house.
2. Ask about history. Ask the owner who did the work, when, and whether a permit was ever pulled.
3. Call the permit office. Ask what records exist and what approval after the fact would involve.
4. Price the risk. Run the ARV calculator and the MAO calculator, then add a cushion for permits, fees and tear-out.
5. Contract as a principal. Disclose that you may assign. See our assignment guide.
6. Share what you know. Give your buyer the same facts you have, in writing, before they commit.
7. Close through escrow. Use an investor-friendly title company and collect your fee.

A retired couple in Spokane’s South Hill area owned a 1950s home. Years earlier, a family member had turned part of the basement into a bedroom and bath. They never pulled a permit and wanted to move to a smaller place without a fight over it.

You spent an hour in the house and found the added plumbing. You called the city permit office and learned the file showed no work. You priced the house at $285,000, using the ARV calculator for a repaired value near $365,000, and left about $38,000 for permits and repairs.

You told the couple you were a principal and might assign. A local contractor took the contract, read your notes and paid a $12,500 assignment fee. The numbers are an example only and real costs vary by house.

Washington rules to know

Disclosure, permits and licensing

The seller of improved residential property generally completes a Form 17 under RCW 64.06.020, and the buyer has time to rescind after receiving it. Exemptions exist, and the statute has versions with different effective dates, so check which is in force. Our asbestos guide covers another issue found in older homes.

Wholesaling rests on your status as a principal. Chapter 18.85 RCW defines brokerage broadly and unlicensed brokerage can be a gross misdemeanor. We found no wholesaling-specific statute, and you should check current text. Review our legality guide and talk with a Washington attorney.

Learn it with a mentor

Price permit risk with a mentor

Permit questions can make or break a deal. Mentorship students send us photos and notes, and we help them decide what the risk is worth.

FAQ

Houses With Unpermitted Work in Washington: common questions

Keep going

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