I just got off the phone with an unhappy real estate agent who just learned something new about our standard Texas real estate contract. I represent the buyer in this transaction. Paragraph 6.C of the TREC contract deals with surveys and has three options. One of the options states that the buyer will buy a new survey and another states that the seller will buy a new survey. At issue here is the third option which allows the seller to provide a previous survey to the buyer:
“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.” [the bold is bold in the contract, it is not my emphasis and the Seller’s/Buyer’s is a checkbox to choose whose expense it is]
In this transaction, I downloaded a copy of the survey from the MLS, but there was no T-47 available. The seller’s agent provided neither the survey nor the T-47 to the Title Company with 3 days, which was the amount of time agreed upon in our contract. At this point, the contract is clear that the Buyer is to obtain a new survey at the Seller’s expense so, after consulting with my client, we instructed the Title Company to order a new survey. This was a surprise to the seller’s agent. He does not understand why we need a new survey when the one they have is two years old and no changes were made to the property that would change the survey. The key issue here is that when a survey is passed from seller to buyer, the buyer has no recourse against the survey provider if a problem later arises with or because of the survey. What if the property line was off by a foot? What if the existing fence isn’t on the property line? What if the utility line easement is wrong and the buyer puts a pool into the easement based upon the hand me down survey? While many of these are unlikely, the possibility exists. At RE/MAX Capital City, we always advise our clients (through an addendum to our Buyer’s Representation Agreement) to obtain a new survey for these very reasons. While I find that many buyer’s will utilize the seller’s survey to save on closing costs, that is a choice for the buyer to make. In this case, the Buyer was clearly entitled to a new survey, paid by the Seller, so the Buyer exercised that right. The seller’s agent was upset as he will end up paying for the survey because of his mistake. Having been in real estate for 14 years, I can certainly say that I’ve learned a few lessons the hard way over the years, but that is what helps make me better. When you are looking to hire a real estate broker, be sure they have the experience necessary to navigate the transaction (and a good understanding of the contract is a pretty good idea, too).