I've been trying to get off the HUD for some time now and after a lot of thought, here's how I'm going to move in that direction:
Attorneys order most of the loan closing surveys around here. When a closing goes sideways they get burned like everyone else on the HUD. The Attorneys obviously hate it when I have to dun them for payment since they weren’t paid either They often don't have anything more than a checkbox on a form that says "survey", so they don't identify a responsible party, let alone form a contract. Because of a fairly recent "due diligence" period instated by the Real Estate Board, buyers are sometimes ordering surveys a month in advance of the closing. By the time you realize that something has gone wrong you are already a month out from the survey and it's tough to track those folks down. The Attorneys I talk to tell me they would rather be out of the survey ordering business all together.
I aim to help them by using digitally signed order forms directly from the buyer. These are legally binding under the The Uniform Electronic Transactions Act (UETA). I will make a form for each law firm. When a client wants a survey, the Attorney will click a button to send them the order form which will serve as the contract between me and the responsible party. That should be the end of the Attorney's part of the survey process. I will give the buyers (the buyers are usually the ones who want a survey) the option to pay at closing, but the contract will state that fees are due on delivery of the survey and that all fees are to be paid immediately at the cancellation of the offer to purchase/contract. They will have the option to pay by credit card or PayPal before closing. Any seller-paid closing costs can be accounted for on the HUD.
I am working out the form and will probably pay an Attorney to get the contact language right, but the contract part should only be one or two lines.
I think the main problem is going to be the brokers. I anticipate them telling their buyers “We don't pay for surveys until (and if) the closing takes place, let's find another Surveyor”.
Any thoughts appreciated...
Nice thought, and I have been wondering how we ever got put on the HUD sheet to begin with.
But then follow the money: it's really the Banks dictating that the property have a Mortgage Loan Inspection done prior to them (the Bank) lending any money. So they make the demand and have the expense taken out of the closing costs, basically they get the "peace of mind" for free.
I would love to have each seller contract out services individually, but getting the banks to relinquish their power will prove difficult.
The banks should be getting a survey over the course of evaluating the loan prior to closing or even deciding on the terms of the loan. They need to know that the property they are lending on has value. They make the larger money and that should be a simple incidental cost to being in the business of lending money for home loans.
Hmmm....maybe I should be telling the banks that. I'm sure they'll listen to me. 😀
My local bank says this... "We don't order surveys. We require a title commitment." they don't care if the buyer is signing an owner affidavit or if they have a current survey.
The Title companies would love for all buyers to sign affidavits, as it limits their liability.
The realtors... well, you know.
Which is why it's BEST that the person relying on the survey PAYS for the survey. I've been teaching my clients that they should simply have the buyers contact me directly with their CC info and I will do the work.
Your way may work fine, but it still puts a layer between you and the real client.
Getting paid up front (or at least CC info) means you don't have to worry about what anyone else does in the process.
just my .02.
> Your way may work fine, but it still puts a layer between you and the real client.
> Getting paid up front (or at least CC info) means you don't have to worry about what anyone else does in the process.
:good:
> Which is why it's BEST that the person relying on the survey PAYS for the survey. I've been teaching my clients that they should simply have the buyers contact me directly with their CC info and I will do the work.
Andy,
I am just now coming around to your way of thinking. Credit Card on file before I roll out of the driveway. I have been burned a couple of times already this year. I have been asking a number of the inspectors and bug guys around here and that's how they roll. I am not sure why we as surveyors ever agreed to get paid at/if closing.