Larry,
Roughly 25% of my work is with one time clients performing typical lot and block type surveys for closing purposes. This section of the market is currently grossly under priced and not the type of work I normally shoot for. However there just simply isn't enough of the good clients/work to go around in my area so I have to do some of it as fill in work.
So with the above stated, lets look at a typical (for this type of work) recent request:
Young couple contacts me to perform a boundary survey on a small lot they are purchasing in a platted subdivision from 1895 because their bank is requesting it. Money is tight and the cost of the survey will be applied to the loan.
Subdivision history: It is your typical NY pretty picture plat from the 1800's that was used to subdivide existing large acreage property when the acreage holder went bankrupt and hired the cheapest surveyor they could find to make a quick map and get to selling lots fast. Based upon my previous work in this plat (nothing close) I already know that I will find a hodgepodge of corners (none original) and the recent surveyed corners will not agree with each other (even in the same block) let alone across the street etc. I estimate that at a minimum it will require surveying the block (15+-Lots) and making a well reasoned decision based upon found evidence and occupation. There will be no clear cut solution only one that disrupts the neighborhood the least. In essence, I am being asked to make honey out of horse S___ and put my name to it. No problem with that, only the cost to do so.
I estimate (by hours) the cost to run minimally $1,800 for a full survey with corners and legal (and that is hoping this block isn't to bad). You could spend weeks in there trying to sort it out properly only to find that the mow lines are just as accurate.
Now at first blush the simple answer is to just say no and let the bottom feeders have it, but as I stated, it is fill in work. So I thought I would try something new and use your value based pricing. I spent an hour or so at the site educating the client on what is involved, how my survey will benefit them down the road, what a great guy I am, how clean my teeth are yada yada etc.
They thanked me for my time but said that kind of money was way out there and that they had received a survey offer of $800 and are going with it as they don't want the survey in the first place. So basically their value of the survey was $0 and no speech from me was going to change their minds.
Now, if this was the exception rather than the norm I wouldn't think twice about it and move on, however, sadly it is the current state of our industry (at least locally.) I see this scenerio playing out more and more, it's a race to the bottom.
When the perceived value is $0 by the general public it's going to take a lot more than education to correct.
How can we turn it around?
Respectfully,
Jim Vianna
Jim,
Should I start out by calling you a bunch of ugly names and questioning your family heritage? LOL.... of course not. So don't worry about being too polite. I know we are friends so say anything you mean.
As for a reply to the substance of your question, I am headed to bed this evening and have a long day planned for tomorrow. (My alarm is set for 3:45 am so I should have heard my bed calling an hour ago.)
Rest assured that I do have several thoughts and will get back to you with some thoughts but it may be late in the day tomorrow.
Tell Lori and the kids hello for me.
Larry P
> Should I start out by calling you a bunch of ugly names and questioning your family heritage? LOL.... of course not. So don't worry about being too polite. I know we are friends so say anything you mean.
>
being straight up here and not busting balls, How do we fix this problem? how do we get everyone on the same page?
Respectfully,
Jim Vianna
> > Should I start out by calling you a bunch of ugly names and questioning your family heritage? LOL.... of course not. So don't worry about being too polite. I know we are friends so say anything you mean.
> >
>
> being straight up here and not busting balls, How do we fix this problem? how do we get everyone on the same page?
> Respectfully,
> Jim Vianna
Jim,
I know you were serious with your excellent question. I was just kidding around with the calling you names thing.
Hitting the woods shortly but will be back with some thoughts this evening.
Have a great day.
Larry P
I think this is an important question. I think this is the state of the surveying profession in much of the country. It certainly is where I practice. Can't wait for the answer!
> Larry,
>
> Young couple contacts me to perform a boundary survey on a small lot they are purchasing in a platted subdivision from 1895 because their bank is requesting it.
>
Jim, Great questions and it should lead to some good discussion. Well maybe it will.
But, I'm going to suggest that part of your premise is seriously flawed, right out of the starting gate. I don't think you were contacted to perform a boundary survey. I think you were contacted to perform something less than that, what we call in Alabama a "Mortgage Survey". Certainly if your state's laws don't allow for it, then your hands are probably tied. But, that doesn't change the fact that the bank is not wanting a boundary survey. The bank is only interested in things that endanger their interest in the property. They only want to know if the lot exists essentially as described in deed and tax map and that the house exists essentially as described in the loan documents, such as the assessment. They also want to know that the house is contained within the property lines and setbacks if any. That is mostly what interests them. The fact that a fence or even a rock wall leans over onto the property half a foot... well, that is not a concern of theirs. The property owners problems are not the banks problems. Only when their interest in the property is endangered.
Stephen
WV allows for "Mortage Surveys", but I would argue that it would be difficult if not impossible to do one, (without substantial risk) in the type of neighborhood described, unless you did a boundary survey first. Our own personal policy is that we will not do "mortgage inspection" unless we have already surveyed the property. For example in a subdivision we have previously done, or on a property we have previoully surveyed that is not necessarily in one of our subdivions.
> I don't think you were contacted to perform a boundary survey. I think you were contacted to perform something less than that, what we call in Alabama a "Mortgage Survey".
> Stephen
Hi Stephen,
No such animal here, it is a certified to NYSAPLS code of practice real boundary survey the bank wants
Jim
I don't think you were contacted to perform a boundary survey. I think you were contacted to perform something less than that, what we call in Alabama a "Mortgage Survey".
Also not allowed in New Jersey.
In that case, then yes, your premise is sound. My post contained a fair amount of supposition based on my experiences in several states.
I have been in similar circumstances many times over. I too have a canned speech that I deliver about how I do a thorough job and how I perform a true boundary survey. Back when I was solely in private practice I probably convinced about 1 out of 25 people. With such a low success rate, I grew less and less patient and concerned with trying to convince people and my speech became shorter and shorter. Finally in the last few years the speech has shortened down to "my price for that will be around $1,000, but you can get it done for less." There must be something intriguing about the way I state this because, ironically, my success rate has risen to around 1 out of 10.
There aren't many people who are looking for quality in a survey of their lot and I doubt that anything can be done about that. I just let it be.
Stephen
I believe a lot the the problem is in what people perceive they are purchasing, and I'm not talking about the survey. If you ask most people they are buying a house. Yes I know that from a legal standpoint they are buying the land and everything on the land, but the realtor is selling the house or more specifically a "home". The Listing talks about the number of bedrooms and baths, hardwood floors, a new kitchen and whatever else will sell the home, rarely is the lot itself even mentioned.
I believe this is why buyers (especially first time buyers) are far more willing to spend money on a home inspection then a survey, and when money is tight the survey is viewed as not necessary. "I'm buying a home and I'm sure it's on the property"
My experience has been that most people don't see a value to a land survey until they have lived in the home and had some type of issue, maybe with a neighbor or just wanting to know what they own. I also find that second time buyers are more likely to see value in a survey than a first time buyer.
I know this doesn't apply to all properties and all areas of the country, but I do believe it applies to most single family homes on smaller building lots, at least in my area of the country.
All Value Pricing got me was a Bankruptcy, Foreclosure, and now Food Stamps, it don't work in my area sorry to say....:-(
> How can we turn it around?
>
> Respectfully,
> Jim Vianna
Look at what they did in Britsh Columbia.....
BC Land Title and Survey Authority
They are a PRIVATE Non-profit Orginization started in 2004
Their goals are to provide efficient, enhanced real estate transactions and they are well on their way to reaching that goal....Targets exceeded....
I had 2 lengthy interviews with them, thanks to Michael Binge; you can also get a lot out of reading his article
Your post eludes to the frustrations we all face; a system that works would be a good start to relieve that....
Douglas Casement, PLS
There are clients that value based pricing works . Mostly commercial side of it and then it works only with long standing clients or clients that know my reputation for doing such work . Value based pricing is what the client is willing to pay for YOU to preform the work . If they do not know you its hard to convince them of the value of you preforming the work over some other guy cheaper.
Jim,
I am very tired but will give you some quick thoughts and try to explain in more detail later.
The June 2012 issue of my POB Value Pricing series addresses the Client Matrix. In that article I stress the importance of determining what class client you are talking with. The class of the client determines what factors are likely to motivate the client and will give the professional a good way to successfully approach the work.
To me, knowing the class of the client is the first and possibly most important question to answer.
You told me the answer in your initial setup.
> Young couple contacts me to perform a boundary survey on a small lot they are purchasing in a platted subdivision from 1895 because their bank is requesting it. Money is tight and the cost of the survey will be applied to the loan.
This almost certainly means the young couple is a class two client. They want the survey not because they see the value you (or anyone else) can provide. To them the survey is little more than a check mark on the form of some bureaucrat.
>
> I spent an hour or so at the site educating the client on what is involved, how my survey will benefit them down the road, what a great guy I am, how clean my teeth are yada yada etc.
Knowing they are a class 2 client tells you that your efforts of highlighting the benefits of using a real professional vs. a lowballing shortcut taking hack are wasted effort. If they could have found someone down at the county office to put that check mark on the bankers form for $25 they would have done it.
This is the very nature of class 2 clients. The only thing that matters is cost. The cheaper the work can be done, the better.
> When the perceived value is $0 by the general public it's going to take a lot more than education to correct.
The perceived value by class 2 will always be close to $0. The trick is to find a way to deal with class 1, or 3 or 4 clients. Spend as little time as possible on class 2. Even as fill in work you might be better off spending that time cultivating your relationship with other clients. (I say maybe. Only you know your business exactly.)
There are some ways to get better at pricing class 1, 3, and 4 clients. But there is no right way to price the wrong client.
Will try to expound more later. For now, it has been a long day and I am headed to bed.
Larry P
>
> Jim, Great questions and it should lead to some good discussion. Well maybe it will.
>
> But, I'm going to suggest that part of your premise is seriously flawed, right out of the starting gate. I don't think you were contacted to perform a boundary survey. I think you were contacted to perform something less than that, what we call in Alabama a "Mortgage Survey".
> Stephen
Exactly right. The couple had no interest in a survey. All they needed was a checkmark on a form.
Larry P
> > I don't think you were contacted to perform a boundary survey. I think you were contacted to perform something less than that, what we call in Alabama a "Mortgage Survey".
> > Stephen
>
> Hi Stephen,
> No such animal here, it is a certified to NYSAPLS code of practice real boundary survey the bank wants
> Jim
We all know whether or not Mortgage Loan Inspections are allowed where we practice. But it does not matter what we know. What matters is what the clients know. All they know is some evil banker wants them to pay hundreds of dollars for something that is nothing more to them than a checkmark on his form.
No wonder many of these people are pissed off at you from the first moment they pick up the telephone to see what it might cost.
Larry P
PS: This is exactly why talk of laws requiring surveys for every loan or every transfer of land is a terrible idea. What is worse than an evil banker putting his hand in your pocket in the name of some no value checkmark on his form? Having someone from the government tell you that same thing.
