I have a home that I bought back in 2001. I am contemplating selling it, but there is an 1100 SF shop (garage) attached with a MIL apt above it (approx 950SF with kitchen, full bath and 3 other rooms) that has a separate entrance. The total house SF is 3050. I have calculated that it will cost at least $6k to pay for county permits etc to get that addition permitted retroactively. I run the risk of having to do some pretty expensive electrical updates (the structure seems to be built to code and no outstanding issues that are obvious) as the house was built in 1978 and the addition doesn't meet current code as far as number of outlets, separate circuits, and arc-fault circuits installed.
In the current market I'm thinking I could sell it as is and probably offload it with a $10-$20k reduction in market value. Anyone have any experiences in similar situations?
Personally, if your local market is hot, I would sell as-is with a slight discount.
You could spend plenty of $ to get your house up to code and not get 100% back at the end of the sale.
Plus a home inspector WILL find more issues with your house, even if you get what you mentioned above corrected.