Got a call this afternoon from a real estate broker that I've worked with in the past. He's a small town gentleman that does big land deals. Last one of his I worked on was 2500 acres.
He's working on a contract that is just about hammered out. Both buyer and seller are in other states. They are going to need the exterior corners set for an estate that consists of 27 separate conveyances. He needs a ballpark number to throw at the seller for the price of the survey.
I plotted all 27 out and here's what they look like:
The contract calls out for 720 acres. If you add all the area up of all 27 deeds, they indeed add up to 720 acres. Trouble is some of the conveyances included land that is also included in some of the other conveyances. My estimate of the area described is 580 acres.
He told me the contract price was figured on acreage. There's a 140 acre difference. Somebody at the abstract office has egg on their face. This should get interesting. :snarky:
With that much smaller price, there is a risk that the seller will back out or the broker decide he can't do what he wanted with it. Better they know up front.
Dear Mr. Broker,
I thought you and your seller should be aware that a preliminary look at the descriptions shows significant overlap between some of the parcels, resulting in a total of approximately 580 acres instead of 720. The actual number will not be known until we perform a survey on the ground.
Must agree with Bill on this one. Quickie phone call will make things exciting. Doesn't matter too much what the survey is going to cost now that everyone knows one must be done no matter what.
This is much more entertaining than the call I received a couple of days ago from a real estate agent. Last year we had cut two cropland parcels out of what would normally be a 120. That left rough, hunting ground, which is his favorite kind of listing. He had it listed as being 120 minus the number of acres sold and someone had questioned the acreage. I tell him the remaining acreage and he is shocked because that is about four acres less than what he had been telling everyone. So I said, "Remember that cemetery surrounded by the eastern chunk of farmland? They don't own that."
Acreage
The cardinal acreages in conveyances has to be one of the biggest "pain-in-butt" items I deal with in our rural areas.
Someone sells "40 acres" at 2K an acre and the contract is written for 80K. Here we come measuring things up and there is only 39.2 acres....AND the seller is the one paying for the survey.
Sellers are never in a good mood. I've even been accused of "bein' in cahoots" with the buyer! +o(
Now I have seen more and more contracts written lately with a "per acre price" stipulating the final price will be figured after the survey. Hopefully that trend will continue.
> Quickie phone call will make things exciting. Doesn't matter too much what the survey is going to cost now that everyone knows one must be done no matter what.
Exciting enough to maybe kill the deal with that much of an acreage discrepancy.
My question is: paden did some work to come up with that acreage information. What is his work worth in this instance? At $x.xx per acre, he just pointed our a huge dollar difference if it was a "so much per acre deal based on 720 acres". The buyer (who can potentially back out) is grateful for the information, the seller is probably PO'ed! I don't know what paden will charge for this information. I sure hope something other than a couple hours. But then whos going to pay? He should bill the broker who asked for the information but if he provides info that kills a deal, do you really think the real estate broker will pay?
This is a big issue all over. Surveyors have information in their records or enough knowledge to generate valuable information, as in this case, but how do they get paid for that information? His information just had an effect on a land transaction which could mean hundreds of thousands of dollars to someone but whats he gonna get out of this... a couple hundred bucks - if he gets paid at all?!!? How do we deal with this?
I hope Larry P. chimes in with his knowledge!!
pro bono...so to speak
No pay for the time spent. Just part of putting a job together for fee estimates.
Not to worry though. I've previously done boundaries of this section and 3 adjoining sections. The north boundary is a standard parallel. Lots of original monuments still in place. One mile of road frontage on six closed sections. I've got keys to every gate and I'm on first name basis with all the lease holders.
Even though my final invoice may be five figures, My fees will probably be a great deal less than someone that hits the ground cold out there.
I don't mind at all plotting out a few deeds. It gives me an edge on the other guys.
I tell people this all the time. I am a surveyor. My product is data. When I give that data out I need to be paid for that data, otherwise I will no longer be in business. If people take data from me without compensation, it is the same as taking an item off the store shelf and walking out without paying.
Our business is a service to the community at large, but it is still a business.
pro bono...so to speak
This is why Realtors exclude Surveyors from land transaction deals whenever possible... Think of the commission he stands to lose!!!
Acreage
> Now I have seen more and more contracts written lately with a "per acre price" stipulating the final price will be figured after the survey. Hopefully that trend will continue.
The wierd/strange/common "issue" with the "per acre price" condition is that probably 95% of the buyers couldn't tell you how big an acre is, either by square footage or dimensions!!
Big land deal...big problem...no problem
> I tell people this all the time. I am a surveyor. My product is data.
> Our business is a service to the community at large, but it is still a business.
I think you hit the nail on the head here. But I think I'd add "..based on my professional opinion..." just before the word "data"
Surveying based on an acreage determination is no different than working on a commission or a contingency basis. Both unethical in just about any state. I don't believe that is what Mr Cash is alluding to, but there are those out there that will (likely not on beerlegger).
But agree with others in the "...this is my estimated fee based on what I think it takes to complete the project...". If the deal falls apart... don't make their problem your problem. AKA big retainer & COD for the rest.
Acreage
don't forget the seller who gets verklempt because they didn't realize the right-of-way they gave up actually constitutes acreage. acreage that they probably got paid double the value for...