Just a few years ago no one seemed to care if a home improvement or addition was done without permits. Appraisers are now required to call out differences between square footage on tax records and actual measurements. If the home has an addition that was done without permits some banks will not lend on the property, others reduce or eliminate the value of the addition.
When you buy a foreclosure permits are even more important because you don’t get any history of what improvements were done or who did the work. When improvements are done by a homeowner or unskilled worker the results can be disastrous. I have seen beautiful bathrooms with the marble falling off the shower walls because it was not installed correctly. This is something you would not be able to see, and likely a home inspector would not be able to find until the damage was obvious. I have also run into homes that had windows installed without permits and the windows did not have any headers (the beams that support the wall and roof above the window). The windows in this same house were installed in such a fashion that the walls had no shear (support that would keep the home from falling down in strong winds or mild earthquake).
Electrical work done by homeowners is almost always done incorrectly and creates unsafe wiring and grounding, overloaded circuits, and unprotected wires.
We don’t like getting permits because it cost money, slows down the job, and of course the building inspector will see everything you are doing. Most people feel they are doing a good job and the permits are not necessary but building codes are designed for safety and are not always easy to follow.
If you buy a home that had work done without permits and you start a project with permits it is possible the building inspector will notice the other work that was done and make you get permits for the old work. Remember, the responsibility follows the home so once you own the home you also own the improvements that were done by prior owners.
Most homes in Marin County are older and I would guess that many, if not most, of them have had work done without the proper permits. When buying a home a full investigation of its permit history is in order. Talk to the county or City, look at the permits and if the permit does not have a “final” stamp that means the work was not done or at least not signed off by the building inspector. Buy the house if you like it but discount your price for work that may need to be redone.