Clear Close – Tip #3

Posted: March 14, 2008 in General
Tags: , , , ,

I got not a 1 comment on the Third Party Financing Addendum blog…interesting! Either people don’t know the real purpose behind this particular addendum, or they feel the same waythat I do. Let’s see what happens over the weekend.

So what is tip #3 in order to help ensure a clear close – Survey’s.

This is what a survey looks like – Survey. Not that I think you don’t know what a survey looks like. I’m sure that everyone reading this does. I just like having clickable files on the blog. It’s kinda cool.

Why is a survey important to a clear close? Paragraph C on the purchase contract addresses the survey of a home. If you represent the Seller, then most likely you are given a certain amount of days to provide the Buyer with a survey. Typically it is 5-7 days. If you as the agent do not provide that Buyer with the survey then, most likely, your Seller will be responsible to purchase a new one.

Now, I’m aware that some listing agents negotiate that the Buyer be the one who purchases the survey. However, it is the exception rather than the rule that this happens; unless the listing agent has done their homework and they know that the Seller does not have an existing survey.

Gimme some cash… A survey can cost anywhere from $250-$400, depending on the company. If you as the agent do not provide the Buyer’s agent with a survey in the required time, and the Buyer’s agent has the Title Company or Lender order a new one; then come closing time there is a charge to your Seller for a new survey, but they already had an existing one — UH OH! Who do you think will eat that cost? But what’s more important is that this is cause for a law suit.

A good agent will ask for the survey at the time of the listing. This will, most times, avoid any issues. You can place the survey on Associates Docs in your local multiple listing service. And if you ask for an existing survey at the time of the listing and the Seller informs you that they do not have one, then you can know to negotiate that expense to the Buyer when the home goes under contract.

Another thing to watch out for is if there is a seal on the survey. Look at the one I provided above. You see that big black seal/stamp at the bottom? If the survey that you have does not have a seal, then the Lender will not accept it. And the Lender, most times, isn’t going to care enough to tell you that the survey isn’t acceptable. So how do you get one with a seal? Look back at the picture above with the money symbol! Yes, it costs. And the really pathetic thing is that a lot of companies, like Maverick for example, put a seal that looks like highlighter on the survey so that it won’t fax, copy, or scan. Then there are some survey companies that emboss a seal on the survey so that it won’t fax, copy, or scan.

If you represent the Buyer and you don’t get the survey for your Buyer’s, and this holds up the loan, you can imagine the repercussions.

So, watch out for paragraph C of the purchase contract. And look carefully at the numbered items, 1-3, to see who is responsible. Believe me, we have seen some crazy stuff happen with surveys.

Have a great weekend,

Dustin Curlee

  1. Jim Rooks says:

    To make it even more fun, the contract calls for the Residential Real Property Affidavit to be provided at the same time. This one requires a notary for the sellers’ signatures. If it’s not notarized by someone acceptable to the title company (another curveball going on these days), the sellers will likely have to resign at closing.

    I’ve wondered, though, if there has to be a notarized form to meet the requirements of 6.C.(1).

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