The Survey Exception Mystery

Dated: 07/21/2017

Views: 61

With almost 12 years experience, I always come across "new" things that I did not realize. As a former teacher, I love to learn and love to help my clients understand the real estate transaction. It is common practice in Texas for a Listing Agent to ask an Owner to provide an existing survey and a T-47 (which is an Affidavit to the Survey). Those are then normally uploaded to our local MLS for a Buyers Agent to have access to and provide to their Buyer before or during the Offer process. 

When writing an offer we as agents are trying to use our experience, knowledge and expertise to protect and advocate for the best interest of our clients (at least that is what we are supposed to be doing). In the 1-4 Residential Contract the Survey is addressed in Paragraph 6C; however, the Title Policy and Survey is addressed in Paragraph 6A. Within that paragraph, there are exclusions and exceptions (things the Title Policy-insurance) will not cover. Have you ever read through those?

 A few years ago because of the practice of using the existing survey, the Texas Real Estate Commission add 6A8 which explains the "standard printed exception" as to discrepancies, conflicts, shortages in the area or boundary lines, encroachments or protrusions, or overlapping improvements and **if it will not be amended or deleted from the Title Policy; or **will be amended to read "shortages in the area" at the expense of **Buyer or **Seller.

What? You might say! As the Buyers Agent (which I represent both Buyers and Sellers) I have always checked **will be amended and at the cost of the **Seller. Do I always get that approved on all my offers, nope! But recently I did and the Title Company (who I have never worked with) emailed the parties involved to let us know that the existing survey and T-47 were approved for loan purposes but in order to have it (the Title Policy) amended it would require the Buyers to obtain a new survey. 

That's fine but then they asked about getting estimates and who the Buyer might choose. My first thought was "Why does it matter, the Seller is to pay for it to be Amended per the contract." After much reading , researching, and re-reading...this is what I have come to understand.

The Survey Deletion protects a Buyer for the items the Title Company has written in as exceptions; however, if this is done the Buyer's only recourse should the provided survey ever be challenged is to go to the Title Company because the survey provided was originally given to the previous owner (Seller) and therefore the Surveyor is not responsible for errors but now the Title Company is because they issued the Title Policy. 

Let's look back at the 3rd paragraph above^^^^yes, it should be amended but this Title Company said they were not going to do that unless there was a new survey! Smart move--still trying to figure out why the Buyer is responsible for the cost because that's not how that particular paragraph reads...correct? Well, think about it if the Title Company makes removes the "exceptions" from the existing survey, they open themselves wide up in the event the survey is ever challenged! So, they are falling back on the verbiage in Paragraph 6C to the survey which states "if the existing survey or affidavit is not acceptable to the Title Company or Buyer's lender(s), Buyer shall obtain a new survey at **Seller's **Buyer's expense. 

With the market here being as hot as it is and moving from a Buyers market to a Sellers market, many agents check Buyers expense. As a Listing Agent, my stance has always been we are providing an existing survey and an affidavit so if the Title Co or the lender do not approve it, the Buyer should pay for it. So, to make my Buyer's offers look better, I check BUYERS EXPENSE.

Who is paying for this survey the Title Company is asking for if my Buyer wants the exceptions covered?  

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