Updated September 28, 2026
Yes, but a half-finished renovation is a different problem than a building nobody has touched in years. Deferred maintenance is a list of things you didn't do. Mid-renovation is an active job site with an open permit, a construction loan, and a contractor who may or may not still be on speaking terms with you. Buyers price these two situations completely differently.
The three things that decide how smoothly this sale goes are the same three every time: is the permit still open, is there construction financing that has to be paid off or assumed, and can you show the buyer exactly what's finished versus what's promised.
A completed renovation is an asset. A permitted-but-unfinished renovation is a liability with an asset trapped inside it. LADBS doesn't close a permit until the work passes final inspection, and an open permit follows the property, not the owner. If you sell before final sign-off, the buyer inherits the responsibility to finish the scope of work exactly as permitted, or to formally amend it.
Most institutional and even mid-size buyers will not take on an open permit without pricing in the cost and time to close it out. Some lenders won't fund a purchase loan at all until the permit is closed, which can force a choice between finishing the work before you list or accepting a smaller buyer pool willing to take it on as-is.
If the renovation is financed with a construction loan rather than cash, that loan almost always has to be paid off at close — construction loans are rarely structured to be assumed by a new owner mid-draw. That means your net proceeds calculation has to account for the full remaining loan balance, not just what's been drawn, and you need your lender's payoff figure in hand before you price the building.
Some construction lenders will also want to see the general contractor released or the job formally suspended before they'll issue a clean payoff, which can add real time to your closing timeline. Build that into your expectations before you go to market.
A buyer evaluating a mid-renovation building wants three documents, and most sellers only have one of them ready. The permit itself, showing exactly what scope was approved. A contractor's statement of what's complete versus outstanding. And a bid or estimate for what it costs to finish, ideally from someone other than the original contractor so the number isn't self-serving.
Sellers who show up with all three tend to get offers close to what a finished building would fetch, minus a reasonable completion cost. Sellers who show up with vague verbal assurances get discounted heavily, because the buyer has to assume the worst case on unknowns.
There's no universal answer, but the math is straightforward to run. Compare the cost and time to finish the renovation yourself against the discount buyers apply for taking it on unfinished. If finishing costs less than the discount a buyer would demand, finish it. If the remaining scope is large, if your contractor relationship has soured, or if you don't have the cash or credit to complete it, selling as-is to a buyer who does renovations for a living is often the faster and less stressful path — you just have to price for it honestly. The full sequence for pricing and marketing any LA multifamily sale is in how to sell an apartment building in Los Angeles.
Selling with deferred maintenance covers the more common case: a building with a known list of neglected repairs that nobody has started. That's a pricing conversation. A mid-renovation building is a legal and financing conversation first, and a pricing conversation second, because the open permit and the construction debt have to be resolved before price even becomes the topic. If the same building also carries older, untouched deferred items alongside the active renovation, expect the buyer to price both separately — one as a completion cost, the other as a discount.
Disclosure matters more here too. Buyers will ask what must be disclosed about the property's condition and history, and an in-progress renovation with an open permit is exactly the kind of material fact that belongs in the seller's disclosure package, not something to mention only if asked.
An unfinished renovation doesn't take your building off the market. It changes who your buyer is likely to be and what documentation gets you the best price from that buyer. The sellers who handle this well come to market with the permit status, the loan payoff, and a real completion estimate already in hand — before a buyer has to ask for any of it.
Do I have to finish the renovation before I can sell?
No. You can sell with the permit open and the work unfinished, but expect a smaller buyer pool and a price that reflects the cost and risk of completing it.
Will my buyer's lender fund a purchase with an open permit?
Some will and some won't — it depends on the lender and the scope of what's outstanding. Confirm this early with your buyer's financing rather than assuming it will work itself out in escrow.
Who pays to finish an in-progress renovation, the buyer or the seller?
It's negotiated, and there's no default answer. It's typically resolved as either a price discount for the buyer to finish it, or a seller credit tied to a specific completion bid.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap.
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