The good news is that I received an offer on one of my listings today.
The bad news is that the buyer is requesting a brand-new survey at the seller's expense, even though we already have an original of the survey done in 2001. It was acceptable to the title company when my client bought the house.
When I called the agent with my client's counter-offer and reminded her that we have a survey, she said, "Oh, my company always requires a new survey."
"Huh?" I said brilliantly.
"Yes, we always get them, because of all the lawsuits about encroachments."
Oh, really? Then her company should pay for it is how I feel about it. Who pays for the survey is a negotiable item if an existing survey is not available or acceptable.
Here's what it says in the Texas Association of Realtors contract about surveys:
(1) Within [ ] days after the effective date of this contract, Seller shall furnish to Buyer and Title Company Seller's existing survey of the Property and a Residential Real Property Affidavit promulgated by the Texas Department of Insurance (Affidavit). If the existing survey or Affidavit is not acceptable to Title Company or Buyer's lender(s), Buyer shall obtain a new survey at [ ] Seller's [ ] Buyer's expense no later than 3 days prior to Closing Date.
Note that Texas contracts don't say the survey must be acceptable to the real estate company.
I don't think this should be my client's problem. And I don't think agents of this brokerage should require all sellers (or buyers) to pay $350 for a new survey so that management can rest easy.
What do you think?
They could require it, I guess, but it makes no sense. They should require either a new boundary survey or a waiver which would also protect them.
Featured in the Group "Whacked!!!"
Sound to me like the buyer has every right to a new survey.......and to pay for it as well.
Or, if the Real Estate firm wants it to satisfy their fear of a lawsuit, then they can pay for it.
Your clients are under no obligation to incur that expense.
If the seller's survey is more than 6 months old you need a new one. The reason is that recording is not date sensitive and the mortgagee has no input as to changes in property encroachments.
If you are trying to save the buyer the expense of a new survey, pay for it your self. Your commssion more than compensates for it.
Robin, we are both in Texas so y'all can counter and then have the buyer pay for the survey if they do not want to accept the previous one as apprroved. Lots of ways to look at it though I have been accepting the previous surveys with the correct affadavit!
I have no problem negotiating on this issue on behalf of my client.
My point is that I believe this company is passing along an unnecessary cost to the principals in the transaction whom they are supposed to be representing. Any liability issues they have should be covered by their E&O insurance.
If a real estate company is not party to a contract I don't see how they can require a new survey. Now, it seems like the Title Company and the Buyer's Lender get a say....other than that, sounds like somebody is full of themselves. Are they just trying to blow a deal? Or do they have an "in" with a survey company? Or what?
The historic reason for the survey was to establish where the boundries of the tract were located. In a sale of a home in a modern subdisivion, that is almost never the driving reason. Usually it is about lender requirments. In order for the loan to be sold on the secondary market, the file has to have certain things in it to be a "conforming file". One of the items on that list is a survey. The reason that the buyer has historically paid for the survey is because it is an expense of the buyer's loan, just like an appraisal.
It sounds as if you are still negotiating the deal. There have been times when I have tried to get that cost moved over the the Seller. The thing about negotiations is that you can't get it if you don't ask for it. And, you are telling them no. Nice try on their part!
Next?????
Here in AZ anyone taking a 9 yr. survey seems unlikely - with subsidence, etc. - our land in on the move - literally.
(While the brokerage is not a principal in the contract, it is a party in the deal - brokering and "guaranteeing" the legal activity [with the assumption of liability - so they will manage risk rather than waiting to see if they have E&O problems, and subsequent increase in premiums] of it's portion of the transaction.)
Is this really worth dropping out of contract?
"Oh, my company always requires a new survey." is a ridiculous statement. This is a client decision. Many real estate attorneys recommend a new survey and that does make good business sense.
Who pay for the survey needs to be negotiated.
Interesting comments! Thanks for stopping by and expressing your opinions, everyone.
I have never heard of a reak estate brokerage requiring a new survey.
Shirley, it is the one that has white signs with green writing.
HI Robin,
Interesting topic,
there are a number of issues at hand here that I am having a bit of an issue with
since when does a real estate company policy finds its way in a contract to which the agents not their companies are party to??? I doubt that the sellers or the buyers lawyer would allow a clause to be included in a contract just because it is the policy of an entity not party to the contract.....
Since when does a house get up and move in such way that a recent survey is rendered useless. If the quality and competence of the surveyors is in question, what does that say about the new to be created survey?
If in fact encrouchment issues exsist in your area, why would you even want a site survey, why would the seller or buyer not want or use title insurance... As they will actually fix and or compensate the parties for any site problems (at least they do so In Canada).
By the way, as the sellers agent, one could suggest to your client that one could counter the offer by removing the survey requirement and provide the existing copy with the counter, and most likely the buyers will be perfectly fine with it.
Happy Selling
This is absurd. Anyone can look at a survey and determine if improvements have been made since the survey was done initially. In Texas the title company will often issue a T-19 endorsement if there are some encroachments noted. The seller also signs an affidavit that swears no improvements have been done since the date of the original survey.
If the buyer is not happy with the existing survey then they should pay for another one.
On a side note - If the survey provided is poor quality and very old, then I would want another one completed even if the title company was fine with it.
Robin,
While not a lawyer and not allowed to practice law, one must agree with the other comments about a real estate company not being a party in the sale.
We can make suggestions, recommendations and give advice, however telling a client they need a new survey "just in case" is out of bounds, IMHO.
Also agree, if the buyers want a new survey, well pardner go ahead on and git one yourself! Free country and all.
Thought that is why we have an T-47 here in Texas??
[NOTE: A T-47 is a Texas Association of REALTORS (TAR) promulgated form titled "T-47 Residential Real Property Affidavit" which is a seller or sellers' affidavit they have made no changes to the property since they purchased it. It along with an existing survey, is usually enough for any title company or mortgage company to accept an existing survey.]
Dominick
It's a negotiable item, so buyers should feel free to ask sellers to pay for it, and sellers should feel just as free to decline.