The more I search for REO properties in my area, the more illegal additions I encounter. Does anyone know how the banks handle this? I know it's sold AS IS but every property in the area is the same way. It's a big problem. I don't know how they will sell. I have seen some PS then Active again & when I ask the agents they say the buyer cancels the contract due to this issue.

In my area CA....there getting sold with their illegal additions, it's the buyers responsibility to obtain permits or receive a fine, plus the city will make them remove any not permitted quarters.

Are the banks willing to negotiate in bringing asking price to a bargain in order to get rid of these type of properties? I know it will be a headache for the buyer. I think the best bet would be to bring the addition down. Has anyone dealt w/a deal like this?

In some neighborhoods in my market they *all* have illegal additions/garage conversions. It is on buyer to investigate whether these are up to code.

Whether the local municipality will ever do anything about them or just grandfather them all in is anyone's guess. I've not seen the local powers that be do anything about any of them.

I comment on the additions/conversions in my BPO's & thus far none of my sellers have reduced anything just because of an addition.

In fact I have one right now that it took awhile before I could even reconcile the variation in square footage the addition was done so well it it is seamless. So it comps out as the original sq footage 3/2 & for that money the buyer is getting a well done 4/3.