| Title Policy and Survey - 3 Important Strategies to Help | | | | they go ahead and pay for a new survey. A survey |
| You Close the Contract in Your Favor | | | | generally costs about $500. However, if the old survey |
| It is amazing how little attention to detail buyers and | | | | is available from the seller then that money can be |
| their real estate agents pay to the "residential contract" | | | | saved but then an affidavit must be signed and |
| which of course is the most important document in all | | | | notarized by the seller which says that no additions, |
| of the paper work associated with buying a home. | | | | garage conversions, out buildings etc. have been |
| This article will discuss three important strategies that | | | | added to the property since the date of the existing |
| you as a buyer and your agent should know and act | | | | survey. On acreage purchases one should definitely |
| upon before completing and executing the contract | | | | buy a new survey! Old land surveys were inaccurate |
| One strategy significantly reduces closing costs and | | | | for the most part because of crude measuring tools |
| the other two strategies will help insure you against | | | | and techniques. |
| potential law suits with regard to shortages in area or | | | | Because FEMA updated all of the continental flood |
| boundary lines, encroachments, protrusions and | | | | plain information in 2007, it is even more important now |
| overlapping improvements. | | | | that buyers obtain a new survey. |
| First let's discuss the money saving potential with | | | | Third is what is called a "survey deletion clause" which |
| regard to the title policy. This closing cost is usually one | | | | is found in the contract itself. This clause should be |
| of the most significant. In cities like Prosper, Plano, | | | | removed so that the buyer will have title insurance that |
| Frisco and McKinney TX where we do most of our | | | | protects him in matters of discrepancies, conflicts, |
| transactions we find that this closing cost especially on | | | | shortages in area or boundary lines, encroachments or |
| new home construction is charged to the buyer. This | | | | protrusions or overlapping improvements. |
| usually amounts to about 1% of the price of the home | | | | All the buyer or agent has to do is tell the title |
| or about $3000 on a $300,000 home. | | | | company to remove the survey deletion clause. This |
| Builders are notorious for sneaking this title insurance | | | | additional protection to the buyer will generally cost |
| premium into the closing costs for the buyer. For an | | | | about 5% of the normal title insurance cost. So, if the |
| unseasoned buyer or agent, this title insurance | | | | policy is $3000, it will increase by $150...a small amount |
| expense may appear to be just one of those items | | | | for avoiding a potentially huge issue with a neighbor or |
| that have to be paid at closing much like the | | | | the municipality. And, hopefully at no cost to you the |
| homeowners insurance, appraisal fee or attorney's | | | | buyer because you had already successfully |
| fees. But guess what? This is a very negotiable item | | | | negotiated the title insurance to be paid by the seller or |
| and one that your real estate agent should insist that | | | | builder. |
| the seller or builder pay. Do not assume you have to | | | | In conclusion, negotiate the title insurance premium, buy |
| bear this cost. Failing that, my suggestion is to split it 50 | | | | a new survey and remove the survey deletion clause |
| 50. | | | | from the contract...all in your favor as a buyer. |
| Second is the survey. We recommend to buyers that | | | | |