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The house I am looking at has a separate living unit on property that was built without permit.

 The structure is a one bedroom unit with garage that is completely separate from main house. What are my options or should I ask owner to have separate unit inspected and verified as part of possible offer?
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January 03 - Bend
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Answers (3)

In Bend you should check with the building & planning department of the city or if in the county with the same department of the county. You can also look it up on their websites. There are different ways to remedy it depending on each different case.
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January 10
It varies from county to county. An appraiser won't include the unpermitted unit in the square footage so therefore there won't be a value given to it. We see this a lot on acreage properties here in California where I do real estate. In our county San Luis Obispo if it is an older addition that was unpermitted sometimes it's grandfathered in. If it's newer you can go through the process of having the county/city come inspect it and pay the fees or the other option is have the seller convert it back to the way it was before the appraisal is done.
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January 04
Construction without a permit can cause issues with lenders - typically if a lender knows that unpermitted work was completed on the property they will not give a  loan on the property.  I would ask for the issue to be resolved prior to purchase.  I once sold a property of my own that a previous owner had converted the attached 2 garage into a living room.  The appraiser for the people I was selling the property to looked up building permits and noted on the appraisal that the garage conversion had been completed without a permit.  Lender would not loan until proper permits were pulled and inspections completed. I had to then convince the City to allow me to pull a permit and get approved inspections without having to rip off sheetrock - fortunately there was only electrical and I had to have an electrician also pull a permit and approve of the electrical that was in place.  It could get more complicated if you also have plumbing and other inspections that the city would require.  If you are paying cash or it is a conventional loan - this may not be as big an issue but I would still recommend it be remedied prior to purchase.
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January 03
 
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