What is a Survey?
A real property survey is a report that indicates the location of improvements relative to the boundaries of a property. A real property survey report generally contains an illustration of the physical features of the property and a written report detailing the surveyor's opinions and concerns.
What are some reasons why we have to have a survey?
The first reason that a survey is needed for closing is because many of the TREC contracts require a survey. Additionally, most lenders require one to approve the loan.
As far as title needs are concerned, here are some ways that we use surveys:
- To provide area and boundary coverage (for more information on Survey Deletion please see our August Closer's Corner article on this topic
- To create a new legal description (i.e. carving out a portion of a property);
- To confirm the legal description provided by the contract;
- To confirm legal access;
- To confirm physical access (when issuing certain endorsements);
- To issue endorsements that are required by the lender; and
- To locate any improvements in relation to the public utility easements, restricted areas or adjoining properties.
Who is responsible for providing the survey?
The short answer is: This is negotiable between buyer and seller. In looking at the Texas Real Estate Commission's One to Four Family Residential Contract there are three main options. The second and third options are pretty easy to understand as Option 2 has the buyer paying for a new survey and Option 3 has the seller paying for a new survey.
It is Option 1 that can create some confusion between the parties. That paragraph reads as follows (emphasis added):
(1)Within ________ days after the Effective Date of this contract, Seller shall furnish to Buyer and Title Company Seller's existing survey of the Property and a Residential Real Property Affidavit promulgated by the Texas Department of Insurance (T-47 Affidavit). If Seller fails to furnish the existing survey or affidavit within the time prescribed, Buyer shall obtain a new survey at Seller's expense no later than 3 days prior to Closing Date. If the existing survey or affidavit is not acceptable to Title Company or Buyer's lender(s), Buyer shall obtain a new survey at Seller's Buyer's expense no later than 3 days prior to Closing Date.
Under this paragraph the seller is responsible to deliver their existing survey accompanied by the Residential Real Property Affidavit (T-47). Failure to deliver either the survey or the T-47 in the prescribed amount of time means that the buyer now has the right to require that a new survey be ordered – at the seller's expense! A prudent real estate agent should make sure that their client can deliver both the survey and the T-47 in the stated timeline before they allow their sellers to choose this option.
Additionally, the T-47 itself is often the subject of confusion among the parties. The purpose of the T-47 is for the seller to provide a sworn affidavit that accompanies the survey to provide information that is required by the Texas Department of Insurance which governs the issuance of title policies. A title company relies on the statements made in the T-47 to determine if we are able to provide the coverage required by an owner and their lender.
Since we are relying on this affidavit for policy issuance it is critical that a seller make sure they complete this question in full detail:
Notes made in this section will need to be reviewed by the escrow officer well before closing to make sure that the survey is acceptable for the transaction to be insured.
Our closing teams at Texas National Title are very knowledgeable about reviewing and understanding surveys. We are happy to help review surveys before the property goes under contract and we are here to be your partners in navigating this topic. We are the experts that you need and the partners that you can trust to get your deals closed!