How a Land Survey Protects Home Buyers

Purchasing a home involves a lot of different processes all taking place during the same time frame. Once a contract is executed, it puts in motion several actions that must be completed prior to the closing. All of these things take time and require professionals who are knowledgeable and experienced in their particular field. The typical home buyer is a novice to all of this. That is why they need expert counsel by a caring REALTOR who will guide them through the process and explain the importance of things like title insurance and land surveys. Without understanding the purpose of having these things, many home buyers will feel overwhelmed and opt to skip some items to save a little money upfront. Here are a few basics about land surveys and how having one done will help prevent future costs and headaches for home buyers.

What is a survey?

A survey is the official and documented opinion of a certified surveyor on the location of a property's boundaries, buildings, structures, easements, right of way and encroachments. It records projections, variations, easements, boundary lines and is a legal representation of what the home buyer is actually purchasing. A survey is crucial when purchasing title insurance to protect the home buyer.

Why do home buyers need a survey?

The housing market collapse resulted in banks, lending companies, and property management companies receiving a huge volume of properties that they never intended to own and were not prepared to handle. Attorneys and courts were overwhelmed by the number of foreclosures they had to process. For paralegals and and other people in the process, it created mountains of paperwork and massive tangles of red tape (both digital and hard copy) that they had to work through quickly and under ongoing stress. To reduce costs, many essential aspects of proper land transfer were eliminated. These led to many properties being put back on the market with encroachments and other discrepancies in the legal description. Some properties that fell into foreclosure were situated on parcels that were part of large family-owned properties. Banks that made loans to construct homes on these parcels did not always make sure there was proper legal access in place. As a result, the people who purchased the homes from the bank had a costly and tiresome legal process to set things right and have legal access.
Differences between tax maps and survey lines is also a possibility. The property taxes a home owner pays are based on the the size of the property and what is included within the property boundaries. Too often, home buyers pull up tax maps or, even worse, some other online aerial view of property to determine property lines based on fences, trees, the amount of lawn mowed, or driveway locations. This method and taking the word of home sellers, agents, or neighbors is unreliable and will almost certainly lead to confusion and disputes at some time in the future. The only way for a home buyer to know what they are really buying and to protect their purchase is to have a survey done by a certified surveyor and have their own title insurance policy that is in addition to the policy required by lenders.

The cost of a survey

Surveyors typically charge based on how much time it takes to do the survey. Factors like terrain of the property, access to records and size of the parcel all influence the cost. Some surveys do not need a printed map of the property. It reduces costs if all the buyer needs is flags and corner markers. If the buyer uses the same surveyor who did the previous survey, it is typically less costly than hiring someone unfamiliar with the property. Buyers can also reduce the amount of time a surveyor will spend doing their field work by making sure property lines are clear. Much like title insurance, the initial cost is minimal compared to the value of the protection and peace of mind a survey provides.

A Guide to Working With First-Time Home Buyers

Buying a home is exciting. It is easy for buyers to be distracted by all the things they want and to overlook many aspects of the home buying process that are important. For the mortgage company, it is all business. They make sure they are protected by things like title insurance. First-time buyers want the most home they can afford. Sometimes, they pursue more than they can comfortably afford. Without proper guidance and counsel from a knowledgeable REALTOR, these novice buyers will skip on procedures such as home inspections by a third-party professional and their own title insurance policy to try and cut their costs.

Connectivity increases vulnerability

The National Association of REALTORS states in their "Real Estate in a Digital Age" report that 68 percent of first-time buyers are Millennials between the ages of 25 and 35. They make a decent living with an average income of $84,500. Many of them witnessed the housing market collapse and have seen their parents struggle to keep a roof over their family's head. Many of these young buyers have opted to pay down their college debt before they even consider buying a home. They are connected to one another and an infinite source of information on all things (the web) practically 24 hours a day and 7 days a week. However, these accomplished and knowledgeable buyers are vulnerable in many ways. A study by Wombat Security Technologies found that young people 18 to 25 are more vulnerable to phishing attacks because they are so open to provide personal information if they believe doing so will provide additional convenience.

Working with first-time buyers requires tact

It is important to reach and work with all first-time buyers in a way they are comfortable without allowing them to make costly mistakes. These novice buyers think they know more than they actually do. Just as they are more likely to fall for phishing scams, the information they gain from doing their own research online may not be from credible sources. For example, they may stumble across a blog that advises them against purchasing their own title insurance policy because they are already paying for a policy for the mortgage company. But that is not enough to protect the home buyer's investment. Agents must be a resource of reliable information without being condescending.

Really listen and understand their priorities

Far too often, real estate agents fall into a pattern of just going through the motions. Each transaction begins to look the same, and the agent tries to do too much of the decision making for the home buyer because they think they know what is best. It is true that many first-time buyers do not have any understanding of the process, but the agent still works for them and in their best interest. Just because many new home buyers in the market are gravitating to a specific area, price range, or style, that does not mean it is right for every buyer. It is just as important to gather the right information from your buyer as it is to provide them with information.

Be clear about your role upfront

Some first-time buyers do not understand the value of REALTORS. They think agents make a lot of money without actually doing much work. Establish yourself as a resource early in in the relationship, but make sure they understand what you can and can't do. Be sure to provide them with an agency agreement and have them sign a document that explains the different types of agency relationships. Some agents avoid having uncomfortable conversations because they think it might scare potential clients away. It is better to thoroughly discuss the value you bring to them and how you are compensated early, rather than have lingering misunderstandings and conflict down the road.

Taking the time to nurture relationships with first-time buyers is challenging, but also rewarding. Just as many home buyers overlook the value of title insurance, many real estate agents choose to not invest in working with first-time buyers. Title insurance is important to protect a home buyer's investment. Working with first-time buyers is important to have future referrals and a balanced real estate business.

Home owners, winter storms and falling trees

During the fall and winter months, hundreds of trees will be falling in yards and on houses across America. The problem begins during hurricane season and continues through winter. Heavy snows and ice storms frequently get the best of century-old trees. The odds of your home (and you) been struck by a falling tree increase based on the age of the trees nearest your house. Here are a few other things to know and to help you in the event your house is struck by a falling tree.

Who is responsible?

If a tree falls on your house, most likely your homeowners insurance will have to pay for damages. If a tree falls in your yard and does not damage your home, most likely you will be responsible for the clean up out-of-pocket. Even if the tree was located on your neighbor's property, you could still have to make the claim on your policy, pay the deductible, and be responsible for any cost not covered by your policy. If your insurance policy is basic and for your residence only, it may not cover damage done to outbuildings, fencing, pools, or your lawn. The reverse is typically true if a tree from your yard falls on a neighbor's house. The exceptions are when the tree fell due to disease or was properly documented as being a hazard.

Identifying diseased trees

Just like people, as trees age, they become more susceptible to disease and falls. During the first 25 years of a tree's life, it should not lose a notable amount of limbs. As it gets older, limbs fall off more frequently and the size of the falling limbs increases. This is why the Arbor Day Foundation recommends having a trained arborist inspect older trees and advise on proper care. Some basic identifiers indicate a diseased tree:

Uneven growth patterns: previous damage from storms or wind can cause trees to grow lopsided and be a higher risk for falling.

Decay: Because decay often begins inside the tree, look for signs like mushrooms, fungi, and soft crumbly wood. Mistletoe is also a fungus. Its presence indicates some internal decay.

Dead wood: Occasional dead branches are normal for any mature tree. Any large branches that show signs of dryness and bark loss should be removed immediately.

Cracks: Deep splits in limbs or spots with missing bark indicate the tree's structure is failing.
Documenting a hazardous tree

Start by discussing your concern with your neighbor. It is a good idea to document your request that they remove a hazardous tree. Additionally, photos and an assessment of the situation by a tree professional may help your case in the event the problem tree does tumble. It is still possible your home insurance will have to pay for damages, but having the documentation improves the likelihood that your neighbor will have to foot the bill. It is far better than just you saying "I knew it was going to fall" after the fact.

If a tree falls on your home

Falling trees may also bring down power lines. If you are inside the home, cautiously exit the structure. The weight of the tree against your house is causing continuous pressure. The roof and other support structures do not always give way immediately. If power lines are down, call the police, power company, and then your insurance company.

Do not try to make repairs during a storm or rescue personal items. Understand that emergency services are stretched thin during inclement weather, and there are numerous other people in a similar situation. If a tree falls on your automobile, it is going to be a matter for your auto insurance and probably covered by comprehensive insurance. When it comes to falling trees, a few hundred dollars in prevention can be worth tens of thousands of dollars in repair.

The Importance of a Proper List Price

Who makes the decision about list price and sales price? The home's owner.

Who suffers when the list price is too high? Everybody: the seller, their agent, the buyer's agent, the buyers. An improper list price can cause problems at every point of the transaction. Even when (if) buyers and sellers reach an agreement on price, an appraisal for less than the contract price creates headaches for everyone. One of the most difficult and often unpleasant responsibilities for listing agents is having an honest and direct discussion about the market value of the seller's home.

Sellers must understand market value
Market value is often less than the seller's perceived value of their home. Spending thousands of dollars and hundreds of hours on a water feature in the backyard does not necessarily increase the home's value by the amount invested. It can increase the home's appeal, but not always the value. Market value is different than the assessed value for taxes.
The National Tax Payers Union (NTU) reports that about 60 percent of all properties in the United States are assessed at an amount above their current market value.
Market value is determined by homes that have sold recently in the area. How far the home is from things like schools, shopping, medical services, and work centers also factor in. The impact of future construction projects and road development should also be considered. The local economy is perhaps the most influential factor in a home's market value. Despite the recent housing market crash, it is still difficult for many home owners to accept that real estate values do not always go up year-after-year.

Home value estimators
There are several online Home Value Estimators. While technology has improved the lives of Realtors in many ways, these automatic home value estimators often make their jobs more difficult. Without actually naming any of the available online options, some are better than others, but there is a huge error rate with all of them. For individual sellers, the disparities between these computer generated estimates and an informed opinion of value from a knowledgeable agent are often significant.
When agents discuss market value with their clients, they must learn to incorporate the tax assessed value and estimate from online estimators into the discussion. They can encourage the sellers to view these things as a starting point and to use all available information together for making an informed decision about their listing price.

Why listing price is important
A larger pool of potential buyers: Most interest and activity takes place in the first few weeks a home is listed in the MLS. To maximize the exposure to ready, willing, and able buyers, it is crucial that the price is not too high. Even in a seller's market, qualified buyers should be viewed a valuable. A high list price can instantly scare away potential buyers and result in the home remaining on the market longer than it should.
The price directly impacts days on market: There is no need to add wording like "bring all offers" and "highly motivated seller" when the list price of a home is competitive. Buyers often have spent several weeks or months comparing homes and prices in the area. They know how much house they can get for the same price elsewhere. When a home has an unreasonably high list price, contract negotiations typically take longer and are more contentious. This leads to a reluctance by both parties in working together for a successful closing.
Some sellers are not going to get the sales price they hoped to achieve. As a result, they often resent every penny that is deducted from the sales price (namely the real estate agent's commission) and lowers their net proceeds. When they are prepared well in advance of the negotiations and closing, they have time to understand and accept that reality. They make the decision. A tactful and honest Realtor will go over a reasonable estimate of market value prior to listing the home. Otherwise, the seller can feel misled, trapped, and forced into a situation they do not like.