Survey Delay Dilemma
That Shana Acquisto. She’s a luxury real estate broker. Morning topic we’re going to speak about is sort of a delayed dilemma, but not luxury. Just you are no, not luxurious, high luxury. All right. So we have a survey delay dilemma. Let me ask some questions and kind of discuss this.
Yeah, but when when you get into a contract and all of a sudden the survey becomes a problem, then what happens? So Shawna has some stuff she’s going to.
So that’s our first question. So if you are in a contract and you have a closing date, say the closing date is today and you’ve been waiting on this survey and the survey is not received by the closed date.
What happens is it automatically extended or does it terminate because, you know,
You have contractual issues. So let’s kind of talk through that, right? So in the survey or in there, it says, who pays for the survey?
Right. So we can kind of back up a step. So I’m going to have one car go ahead and pull it over, pull over the contract and we’re kind of going to go through it. So we know. So if you go down to six, please. There we go. Now, keep going, sorry.
Just a little lower on there. Go ahead, Shana.
So that’s one thing. Ok, there we go. All right. So here’s where we select who is responsible for the survey. So if you know and this is kind of another little reminder, you need to know if there is an existing survey before you enter a contract. This is best practice.
You need to find out if they if you represent a buyer. Does the seller have an existing survey? If so, and you know it, you select one.
Ok, now buy have a survey, they could have one, but it could not be acceptable.
Yes. So just because they have a survey doesn’t mean that it’s acceptable. So you need to find out if they have a survey and you need to study it and you need to understand does everything look the same now as it does from that survey, right? Or have do you see some changes?
Then it goes on to see if it’s acceptable to the title company and the lender. Great. If not, who’s going to pay for a new one? Just because they provide one doesn’t mean it’s acceptable. So then you determine who’s going to pay for it, right? If you know they don’t have a survey, then two and three are to select who is going to pay for a new survey. Ok, so let’s just we’ve established that so fine.
We’ve got this established and we’re moving along, and I’m going to give you this real life scenario. So the seller provided us a survey. They had not made any changes. Actually, the seller had a survey and they supplied the survey to us, but they didn’t. Within the time that we selected in the contract, they did not provide the TX forty seven. So they provided the survey, but not the TX-47. So therefore it’s not valid, right?
They go hand in hand and you can’t just have one without the other. So because of that, the buyer or the seller was responsible for getting us a new survey. So we had to order a new survey, which we did immediately when they passed that date.
So we’re plugging along here and surveys are delayed. The surveyor is delayed. It’s right before Christmas. Nobody’s working and we had kind of a really rough time getting the survey back. So it comes to the closing date and the survey is not received.
Ok, so we still don’t have a survey, still don’t have a survey we’re supposed to close today. And so what happens here? So I’m asking you guys and if you could chat in now what you think happens at this time, do you believe that the contract automatically extends for this?
Or do you believe it doesn’t? That’s my question to you guys. I’m going to give you a second
Because now you have a timeline issue because now we have a timeline issue, right? And we’ve ordered it. So the buyer and the seller have agreed.
And contractually we are we’ve done everything we’re supposed to do. However, the survey company is the one that’s delayed a third party just and this could be just like about anything, whether it’s a repair or something else, it’s all kind of be treated the same, right?
So I was thinking that maybe it’s automatically extended. It’s not. It’s out of the hands of the buyer and the seller. No, that is not the case. So if let’s go on down or go back up to six Omkar, if you don’t mind. Yeah. So if you go back up here, right there, title policy and survey and you see down here under eight six eight eight, you have one and two.
Will this survey be amended or deleted from the title policy or will it be amended to read shortages in the area? So if you have an issue with the survey and you want that survey coverage right, you want to make sure in this case it was land.
So they wanted to make sure the survey was old that they had proper survey coverage in case something happened down the road.
So in order for us to get survey coverage, we had to have a survey, right? We didn’t have a survey. So the date of closing, here’s the option this was a. Cash buyer. So the day of closing, we can either close and receive the title policy with no survey coverage or you can extend the contract, but there’s no automatic extension in the contract.
So if they didn’t make a decision that day, the next day we’re out of contract, right? And it’s not the fault of anybody other than a third party. So we’re relying on a third party here. So it got very, very tricky because it’s cash, right? They had to make a decision.
We wanted to extend. Then the seller said, I’m not extending so you can either close and have no survey coverage and take that risk or, you know, you’re going to be in default. So it was really a tricky situation. And you know, these are things to think about that just because you have a survey, just because everything’s agreed.
Well, what if you have to order a new one and you don’t get it in time? These are things you need to think about and plan for in the contract. I would say it’s probably the same with the appraisal. However, in that situation, if an appraisal wasn’t done or received right, then you’re subject to a loan.
And the lender could then say, Look, we can’t approve this loan because it hasn’t met underwriting guidelines. Same with the survey.
If that doesn’t change, the timeline doesn’t
Change the contract. No, but it does change if the buyer would be able to maybe get their earnest money back right in this case of cash. There was no option, but in a in a scenario of being financed, you know, that can fall under the the lender can’t complete the loan.
And, you know, therefore, if the lender can’t complete the loan and it’s because of of something like that underwriting guidelines, it’s a different scenario. So just be prepared something to think about. Let’s see. And you guys knew that. I’m so happy.
I say no.
Glad to see that. So there’s quite a few items that go into this. Yeah. And if we’re looking at it, there’s the if you’re getting your earnest or option money back and how that works, right? If you want to get your money back. Right, OK. And then the other questions would be, you know, how it extends and why and then what you would have to do if this happens.
So in that situation, you’d have to sue for specific performance. If you were the buyer to do that or you’d send over an extension right to keep it in contract. You, the other person, doesn’t have to sign that.
The other the other party doesn’t have to sign it, right? There’s no obligation for them to have to do that because of the, you know, the delay of a third party.
Now you said something early in the conversation that was interesting to me, so I’d like to see if we could unpack and rewind on that one. Ok, so you said something about the survey and they provided a survey, but not the two. Forty seven. Right. So the TX forty seven does what the TX Forty seven is an affidavit because for the title company, the title company never goes out to to survey the land or look at it to know if what its correct. Yeah, that’s correct. So they rely on that.
So for them to issue coverage on it, they need to have that sworn statement because that protects them. In the event something happens later down the road, they can come back and say What you said here. Perfect. So, OK.
Yeah. So what that is is here’s the survey. Here’s the here’s the what’s on the property. And as the seller, the T forty seven is them saying this is correct, right? And there’s been no changes to it that would affect it in these lines on here or correct. So the fact that they had a survey?
Mm hmm. There is no changes to it, but they just did not attest to that fact. Right. So then in that moment, essentially they did not have a survey, right? Then you went back and said you didn’t provide us a full survey and acceptable survey.
So now we have we’re going to order it and it’s going to be at your expense seller. And, you know, we whoa.
So you got the other party to pay for a new survey that was the interesting they had to.
That’s what the contract says.
No, I understand that. But that’s impressive. Well, yeah. Why wouldn’t they just sign that? Why wouldn’t they sign the TX forty seven?
I love Stacey because at that. Minute that it hits there, they haven’t provided something Stacey’s like, boom.
All right, so why didn’t they just sign the T forty seven? They were just lazy.
They? I don’t know. I think honestly, that probably was somewhat of the agent’s responsibility. Yeah. First, she should have had that before they even listed the property or considered
They had listed it.
She should have had that taken care of in advance.
Wow, that was impressive to me. Wow. Nice job everybody involved.
She was. She walked in. Oh, way to go, Stacey. So what this tells you on that other
Side trying to be different?
That’s that’s why there’s a process of what we ask you to do. And when we ask you to do it, because if you don’t follow timelines, then all of a sudden so approximate cost of a new survey.
Four hundred and fifty bucks,
Ok, but also delay in time, right? Yeah. So four hundred and fifty dollars is extra expense to the seller or to the seller’s agent.
So you don’t close on time? Yeah, that could be very, very costly for for everyone. Right. If someone is having a simultaneous move or close, I mean, any closing delay can cost thousands of dollars.
So that was a great catch way to go. It’s super impressive. Very, very impressive to everybody involved in that trend.
We were paying attention to look. Looks like the survey is not going to be received by this date. So we engaged with the seller trying to get an extension and they didn’t want to extend. And it’s kind of a mess.
So well, congratulations. It all worked out. It closed.