Greg: Steph, we’re back, good to see you.
Steph: Hello Greg, how are you?
Greg: I’m doing well, thank you. I thought of you the other day. I was having a conversation with a neighbor who’s selling their house, and someone did a survey and found out that the fence on the yard was a couple feet the wrong way, so I’m curious, how often does this kind of thing happen and should surveys be an every day occurrence when someone’s buying or selling a house?
Steph: That’s a really good, common scenario. Lately we seem to be trending, I think, with encroachment issues. The usual scenario is that your client, you know a realtor is listing a property, or there’s a seller, and they go to sell and then they get in contract with a buyer and the buyer does order a survey. Then the seller finds out, lo and behold, something they didn’t know, was that the fence encroaches the property, or there’s a pool over the line, or there’s an issue with a shed over the line, something like that. There are all kinds of different issues that could come up that are survey issues that you can only find by getting a survey.
Greg: Most of this happens when the buyer orders one, are we in a part of the country where that’s usually the case, the buyer orders the survey? Are you suggesting a seller should before they even get their house on the market? Maybe do a little homework to avoid this issue.
Steph: Well, if you’re buying a piece of property, if you’re using a realtor, you will have an option in the contract, the standard contract will say, “Do you want to get a survey?” The idea is, there’s several reasons why you would want to get a survey, and I can give you a few of them.
Greg: That’d be great.
Steph: If you’d like to know where your property corners are, if you envision sometime putting a fence up, that would be a good idea. If you want to verify that you’re purchasing the property that’s in the contract, because sometimes, believe it or not, it’s not quite exactly the acreage that is stated in the contract.
Greg: You mean that sometimes fences don’t exactly line up with property lines? There may be a fudge factor on a human putting a fence up and maybe you don’t have as much land or more land than you thought?
Steph: Correct, and it can go both ways. The adjoining neighbor, they may be fencing in your property into theirs, or you could be fencing in some of your neighbor’s property. Any time you have a neighbor, which all of us do, and there’s a fence, it’s good to put the fence inside your property line so that you actually own your fence. Then you want to know where your property corners are so you know where your actual property lies.
Greg: You mentioned earlier a fence and a pool and a shed. Imagine some of these are easier to deal with than others. You work with closings, what happens in that scenario where someone’s fence is over a property line, or there’s an easement, I guess it’s not a dispute, it’s just, you’re in the wrong place.
Steph: Well, what happens is, it depends on when it happens. If you’re buying a property and you discover, in survey by looking at the survey that, for example, there’s a fence, your neighbor’s fence is built on your soon to be property. There are many things you can do. You can do an easement, with the neighbor. You can ask the current owner, because it depends on the extent of the encroachment. If it is the house or the driveway, something that can’t be moved, an easement really comes into play. A shared wall, something like that, because you’re dealing with maintenance issues if it’s a shared driveway, for example, there could be maintenance issues between you and your neighbor that need to be dealt with. If you’re buying the property, you don’t want to deal with it after you’ve purchased it, you’d like that to be put into place. It’s very important to always consider getting a survey because you just don’t know what you’re going to find. You could have some building or an addition or a garage built on to your property and not know it.
Greg: Yikes. I think I’ve even heard of some circumstances, maybe in a newer neighborhood this would make more sense, where they’re really packed in and someone’s roof line hangs over the property line.
Steph: Yes. That can happen. I think the most common is that there are fences everywhere, and so that is the most common that we’re seeing. Definitely if you’re going to be putting in a fence, you’ll want to have a survey, even if you’ve owned the property for ten years, you decide you’re pretty sure where your property corner stakes are located, but you don’t know for sure, it is good to get a survey before you put that fence in because while you can do an easement if you need to later, it is more difficult because your neighbors may not agree, and then there is a cost.
What happens that makes it a little bit more complex, that people don’t think about, is if you have, let’s say you have a driveway that’s built, your neighbor’s driveway is built on your property. A lot of times people will say, “Well why don’t we go ahead and just deed that little sliver, it’s like a foot, let’s just deed that foot to the neighbor so that we don’t have to have any easement, they’re not going to be complaining that I’ve damaged their driveway. Let’s go ahead and deed it.” What happens is, the underlying property may have a mortgage on it. If you have a mortgage and you try to deed that little foot sliver to the neighbor, unfortunately it makes it more complex because you’d actually have to refinance or get a release of that mortgage to give them that property.
Greg: So it’s not as easy as some people would think it is.
Steph: No, and a lot of people think that, “Oh, I just would rather not have”, sometimes with a shared wall, they’d rather not have the liability and want to just deed the property away, as an easier way to do it they think, but in actuality that would take releasing the mortgage and then you have to redraw the property lines, so you’d also have to do a Minor Plat between the neighbors, which would have to be approved by Planning and Zoning, and it can be a very expensive proposition. If the neighbor doesn’t like, all of a sudden you’ve built a wall on their property, they’re going to want you to either give them the property underlying it, or they’re going to ask, what usually happens because everybody has a mortgage usually, they usually do an easement.
Greg: Okay, so it sounds like it would be in the seller’s best interest to have a survey done before they even put their home on the market, and it sounds like it would be in a buyer’s best interest to have a survey done when they pick a property out and they want to …
Steph: Yeah, a lot of times the sellers, the ideal time to buy a survey is when you’re buying the property, so it’s just something that you should look into as a regular cost of closing on the property. A lot of times, the rule of thumb I’ve heard some people say is, “If you can’t afford to get a survey, which is about $400, approximately, if you can’t afford to get a survey, you can’t afford the property”, is what some people say is rule of thumb. It is something to think about when you’re buying. If you own a piece of property, definitely before you put in that pool, or a wall or a fence, you want to have it staked, you want to get a survey where you get it staked so you know. It’s a little too late if you’re selling, a lot of people don’t purchase it when they sell, so then the new buyer, they take their chances that a new buyer will purchase a survey and will find something that is showing an encroachment.
Greg: Wow. That sounds like good advice. I like the, “If you can’t afford a survey, you probably afford the house”. That puts it in the order of a little perspective. It’s an important step in the overall home purchasing process.
Steph: It really is. In the contract what you want to do is just by ordering a survey, it may be contingent on a survey, but unless it rises to the issue of a title issue, something that would make the property unmarketable, meaning if your house is built on somebody else’s house, there’s a major issue that could cause your property not to be marketable. Those type of things would cause a title issue. The run of the mill fence over the line won’t cause a title issue unless the lender would require an easement. It’s an interesting kind of a catch-22 because although you have a right to get a survey, just make sure that you do make your contract contingent on your approval of the survey. The normal contract language just gives you a right to get a survey, it doesn’t say you have a right to get out of the contract for a survey issue unless you actually affirmatively state that, or if the issue on the survey rises to the level of a title issue, which would trigger another clause in the contract.
Greg: All right. That’s really good advice, because yes, I have read that paragraph and it just says, “Buyer has the right to buy a survey”, but you’re saying if it’s important, make it important and say, “I don’t have to buy this property unless I approve of the survey that comes back.” Then you put a timeline and all that. Really important stuff there.
Steph: Right, and the other thing is, you can be asked to move your shed, if you’ve built something in an easement, let’s say for underground wires. If they need to get in there and dig, that’s the problem, they could technically ask you to dig it up or move your shed, which is very expensive. That’s the worst case scenario, is that you’re asked to move something.
Greg: Great. Well, as always, I’m going to leave today a smarter man for listening to you. I appreciate you letting me stop by today.
Steph: Okay thanks Greg.