Terrible idea. Don’t bill, count or list it as a living space. Check “no” on the form 17 that says have you obtained permits for all remodels. If anyone asks tell them it’s an unpermitted remodel it’s not living space it’s never been a problem there’s no discounts considered and if they can’t accept those terms as what is offered for sale then move on.

Getting “right” with the code enforcement will likely require a tear out of drywall and redo if you’re lucky. Maybe also electrical and framing.