00:04During the pandemic, home renovations reached record numbers.
00:11Some homeowners are now finding out that they can't sell their homes because of the renovations they did during the
00:18pandemic.
00:19Surveys show home renovations surged with spending jumping as people spent more time at home.
00:26The number of homeowners spending more than ten thousand dollars on those improvements more than doubled in the first year
00:33of the pandemic compared to an average year.
00:37Geographically, the Northeast led the way in renovations, followed by a sizable chunk in both California and Texas.
00:45But not every home remodel was done up to code.
00:48It would just cost you more coming back and redoing things rather than doing it right the first time.
00:55It comes back and bites you when you get to that point where you want to sell your property and
01:01then you realize a lot of things were not done properly or they were not done up to code.
01:06That's Visaya Aladeh, managing partner at AFM Advisors, who is a real estate development and investment expert.
01:13He has seen how pandemic renovations play out.
01:17Now, years later, those shortcuts are rearing your ugly head.
01:21And some of those decisions are standing in the way of home sales.
01:26Inspectors say they're now seeing the impact firsthand.
01:30Lisa Giroux inspects houses for a living.
01:34She says in roughly 20 to 50 percent of those homes that she inspects, she ends up recommending that buyers
01:41verify the property's permit history.
01:44I think we're seeing it all over the country, actually, all over the states.
01:48You know, as president, I do have a board of directors and we talk about the state of the market
01:53and and we're all seeing the same thing.
01:55We're seeing flipped houses.
01:57We're seeing during pandemic there was a lot of homeowner repairs being done with or without permits.
02:02Some of these changes were made out of necessity as Americans turn kitchen tables into remote workspaces, playrooms into classrooms.
02:10So during the pandemic, there was a lot of folks working from home.
02:17A lot of professionals, you know, went the route of either remodeling their living area to have a more conducive
02:26working environment.
02:27The result of that was a lot of folks doing the things the right way and some not doing, you
02:35know, things the right way.
02:36From unpermitted electrical work to DIY renovations that don't meet code.
02:43With such an influx in permit requests, some renovations literally slipped through the cracks.
02:50There were limited oversight in counties, cities around the country to restrict renovations.
03:00So a lot of people explored that opening to go out and actually make additions to their property or, you
03:07know, make changes to their property that was not permitted or, you know, approved.
03:15Which means some of the work was permitted.
03:20Some was not.
03:21Was this done properly?
03:23Was the electrical wiring done the proper way?
03:27Was the, you know, plumbing?
03:29Whatever structural changes were made to the property, were they up to code?
03:35Work that applies to both renovations and new home builds.
03:39Many of the homes renovated between 2020 and 2022 were done under intense pressure, high demand, limited labor and rising
03:48material costs.
03:49Now, a few years later, now we're seeing the shortcuts start in a show.
03:53After several years in a scarcity market, home buyers are slowing down and taking their time to do their homework.
04:00Buyers are no longer aggressive as they were during the pandemic.
04:05The days of people paying 100K, 50K over asking price, the days are long gone.
04:15Today's buyers are more strategic.
04:18Which means that that basement bathroom you and your neighbor built without permits might come back to haunt you when
04:26it's time to sell.
04:27As for the buyer, beware, because what looks finished may have not been done right.
04:34Experts suggest using databases like Realtor.com to check the legitimacy of renovations.
04:41Once you've tracked down the permits, it's up to the home inspector to check the quality.
04:46Number one, never waive a home inspection.
04:48Number two, just because it's new construction does not mean you don't need a home inspection.
04:54Just because you have that certificate of occupancy and final sign-offs does not mean everything is working or it's
04:59installed correctly.
05:00And the third thing is make sure you show up at your home inspection.
05:04Be there, be present, take on the education, learn about the house, learn about the maintenance.
05:09Those are the three most important things that you can do.
05:12Negotiating a fix means bringing in specialized contractors to assess the problem and estimate the cost to repair or replace
05:20substandard work to code.
05:22While it seems like the seller's responsibility, buyers are often better off taking control, ensuring the repairs meet their standards.
05:32And even then, there's no guarantee the lender or insurance company will approve the work.
05:39What started as pandemic upgrades are now costing some homeowners time, money, and even their ability to sell.
05:46For Straight Arrow News, I'm Donald Rafari.
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