Just did a follow up on a guy that requested a full survey for a property with a house in a subdivision that he was buying. He told me he had it done for $350 by a company that had to drive over 1 hr to do the job.
I wonder how many hours it took to do the job?
Because I hear McDonalds is hiring..
now that you mention it, they also threw in a double cheeseburger and a small Dr. Pepper.:-)
That too expensive - there are guys doing surveys in Chicago for $250-$275 and coming from about 45 minutes away.
AND, it's gonna do nothing but get worse. A lot survey around here is, for all practical purposes, unheard of anymore. If one has enough sense, and good enough credit, to buy a house they just get on the local GIS site, find their lot, print the picture out and God himself couldn't convince them that they don't have a boundary survey of the property they just purchased. It's sickening from a surveyor's viewpoint, but it is what it is. I'm a 57 year old white male surveyor whose been in private practice for almost 17 and 1/2 years. The ONLY part of surveying I EVEN enjoy is boundary surveying. So, tuff sheite for me. NO 'career changes' at this point. Keep your license current. The occasional odd job that actually pays will come in from time to time. Learn how to grow food if you don't already know how to and be sure to have a SWMBO who is still able to earn a steady income.
Had one a couple of weeks ago where the seller's attorney forgot to order the survey. One of my clients (representing buyer) calls me and asks if I can turn it around in 2 days. 2.5 wooded acres in one of the high-end 'burbs; +/- 2 mil with the house. Seller REFUSED to pay more than $400. They ended up using the prior survey.
How about using a 2005 survey to close on a commercial property with an "Affadavit of No Improvements"? Just found out that little gem from another one of my clients. Isn't that special.
Recently there was a closing on a town lot based on a survey made in 1947. I know that none of the monuments are in place because I searched for them a few years ago doing a survey down the block.
It is amazing what some will do these days and the horror stories developing for us to hear about down the road.
> 2.5 wooded acres in one of the high-end 'burbs; +/- 2 mil with the house. Seller REFUSED to pay more than $400.
>
Remind me again why we, as a profession, haven't based our fees on a flat percentage of the closing price again? 1% would be reasonable for a survey with a +/- $2M liability.
Those $400 limit jobs are the ones where I honestly hope a title company takes a big hit for something that wasn't on the survey.
According to what I am hearing from sources, Title Companies are not taking a hit on something that goes wrong (claims against boundary location they insure) because they do not care. They have delimited their coverage to the extent they have nothing to be liable for and they only go back 40yrs on their research. Anything that comes along has to affect the entire property or exceed an amount that concerns them or they do not enter any defense for the client.
Some events are only limited to the cost of the survey. When the payout is $400 limit on a claim, what do you expect them to do.
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> Some events are only limited to the cost of the survey. When the payout is $400 limit on a claim, what do you expect them to do.
I'm not sure about that part of your statement.
I work with a retired title company examiner, who now does research and drafting for my survey company. The way he explains title insurance is like this:
Title companies make money by collecting one time premiums, not by paying out claims.
The SOP for the claim adjuster is:
1) Ignore all inquireies
2) Deny all claims
3) Never call anyone back
The reality is, of 100 potential claims, using this SOP
91 claims simply go away, never to be heard of again
rest of the claims get dragged out for extended period of time, only after attorneys are involved. Of the 9 remaining, 6 drop off, due to time & expense. The remaining 3, they are settled out of court, with a silence clause, therfor we never hear of the claim or case.
That sounds like trying to collect from a performance bonding company.
I don't know why government agencies waste taxpayer dollars on those. OK the contractor pays for the performance bond and the payment bond but presumably they pass the cost along in their bid. I've never heard of a bonding company actually paying out on those.
$350 is not too far out for what a small subdivision lot boundary goes for around here. i wouldn't loose too much sleep about it. people are still desperate.
$350 > 0 last time i checked.
by the way, a buddy of mine just won an elevation certificate on a job 1 mile from my office. he is at least an hour a way. his fee - $325. i wasn't mad. he is a good surveyor, damn good actually. i guess he needed the cash. can't hate on a man for wanting to work.
That would make perfect sense if the effort involved in the survey was proportionate to the cost of the property. I don't understand why a survey of a $1M lot that takes a day would cost $10,000 but a survey of a $100K lot that takes two days would only cost $1,000.
But I don't understand real estate commissions either, so I guess I'm out of touch with reality. The commission on a $1M home might be $60K for putting a sign out in the yard and filling out some papers while the commission on a $100K home that they have to show to 50 people nets $6K. But then, they might show a house to 50 people, never sell it and get nothing. I prefer not to work that way, either.
I bet the $1million homeowner negotiates a lower real estate commission.
Probably true. A reduced commission on the $1M home wouldn't be too shabby either. The thing is with the reduced commissions on the lower value homes is they don't get shown as much. When we bought our house 20 years ago, the realtor got so tired of showing us houses, he would just print out the MLS in our price range and area and we'd go looking on our own. We liked that better anyway. You can cross a lot of them off the list just by driving by.
Follow Up #2
3 Acres, Wooded, $350... I sure hope this "price shopper" was just slinging the crap.
> ...can't hate on a man for wanting to work.
No, but I'd recommend our entire profession take a course in economics. Fuel prices just went up. Food prices are going up. Insurance prices will no doubt follow, although they have been going up for years. State fees to renew my license went up 30% in February. If we made widgets and the price of our raw materials was going up while we were selling fewer widgets at just over our cost to manufacture them, would you price your widgets even cheaper?
If a widget maker consistently prices his widgets cheaper than the guy across the street, then his only goal is to put the guy across the street out of business. Remember this is the same business model that airlines have used at smaller regional airports throughout America where they priced product below actual cost in order to steal market share from their competition. It's a race to the bankruptcy court, and the guy with the deepest pockets wins. Once the cheaper guy pulls out, airfares typically increase up to what they should have been all along plus a couple of percent to make up for lost profits.
At some point, cutting fees results in 0 profit, and simply equates to cash flow. At the point where one of our poker players raises the stakes and goes below 0 profit to create cash flow, he begins to bait other players in the game to do the same. The smart players fold at that point, walk away with their previous winnings, and wait for a new game.
The business model in our profession contains some fixed fees that we cannot alter. We all need the lights on, we all need a truck with some fuel in the tank to get us to the job, and a phone to allow our potential clients to contact us. Most of us need some help around the office, to get the mail, deal with billing and deposits, keep the books, and answer the phone when we're in the field. Everything I just described is overhead. We as a profession cannot operate at 0 profit margin forever. Our equipment is getting older, our bodies are getting older, our costs of doing business are going up all around us. Yet somehow, we manage to cut our own income day in and day out, and furlough our workers when we have no work to do. The less income we have, the less resources we have to attract and keep the tallent we have in our profession. I watched in awe and disbelief last month as a talented crew chief with 12+ years of experience walked away from the profession. He had personally located more of those GLO brass caps, and lighterwood posts than any other person I know. He and another party chief once dug a 6' hole looking for traces of a bearing tree, and found them. Yet, he can make more working for a lawn maintenance company, than he can surveying. I honestly cannot tell you if he'll ever come back to surveying. Yet you cannot replace talent like that with just any button pusher off the street, and we cannot attract talented college graduates by telling them they'll make $26k/yr to start, and leave them in the field as a rod man.
I go to visit my dentist and his secretary tells me that patient visits are down. Does that mean I pay less for my visit than I did a year ago?
> That would make perfect sense if the effort involved in the survey was proportionate to the cost of the property. I don't understand why a survey of a $1M lot that takes a day would cost $10,000 but a survey of a $100K lot that takes two days would only cost $1,000.
Would you not break even using the percentage methodology? if 1% doesn't work, what would?? The real estate folks obviously came up with a number that works for them, and the market seems to bear it just fine... Meanwhile, we waste time daily trying to determine what it would cost to do a boundary survey when the guy next door will do it for $10 less.
Let me go back to manufacturing as an example: Does it take considerably more effort to assemble a 4WD Cadillac Escalade than a 4WD GMC Yukon? Does GM seem to care? Does the guy on the assembly line at Cadillac make more than the guy at GMC?
Do real estate agents lose money every time they list an inexpensive house? Why do they even bother to list inexpensive houses? They sound as difficult to find buyers for as they are to survey.
When you buy a soft drink in a bottle at the grocery store, is the product any different than you are served in a to go cup at a restaurant drive-thru? Why is the cost per ounce at the restaurant more than 2x the cost per ounce at the grocery store? Is it really because that kid inside the window making $8/hr spent 5 minutes filling the drink cup? The grocery store had a clerk to take your $, just like drive-thru.
Say you take a check for $1k to the bank, and they offer you an account that pays interest. Does your bank pay substantially more interest if you deposit $100k with them than if you only deposited $1k? Banks are in business to loan out money, and cobbling together your $1k check with those of 100 other depositors in order to loan someone $100k to buy a house seems like 100x more work than taking one guy's check for $100k and loaning it out, so obviously the bank should pay 75x-100x more interest on a $100k deposit than a $1k deposit.
The way I see it, if we took the element of "price" out of our profession, then we could easily put the element of "customer service" back into our profession where it belongs, and do a better job of promoting our profession and servicing our clients. Instead, we seem bent on providing our services for the lowest possible price, which tends to limit our interaction with the client because we need to do a larger volume of work to keep the income up. When you go for professional services, like a doctor, a dentist, a lawyer, do you make your decision on cost alone? or does the interaction you have with the professional make any impression with you? Are you likely to go back to one who rushes in, says 12 words to you and immediately walks out to see his next patient? I know I tend to go back to the ones who take a moment and get to know a little about me, my situation, and my concerns.
You know, maybe if we sat down with the realtor and the purchaser to review our survey with them prior to closing, we could develop a better interaction with the public and our client base.
where2
Sorry, I'm still struggling with the percentage concept for surveys.
We are led to believe that the Escalade costs more than the Yukon because it is a better vehicle, more features, fancier materials, etc. I don't have experience with either one, so that might or might not be true. Unless you are planning to give better service and use better equipment and materials on the more expensive property, I don't see the analogy.
A consumer has a choice whether to buy his soft drink at a store or a drive-thru. At the drive-thru you don't have to get out of your car and you get ice and a straw. Again, some consider that better service and are willing to pay, not that the liquid is any better in one place or the other. So, that's like going to a surveyor that gives better service, not that the drive-thru charges a rich guy more than a poor guy.
You might have something with the bank analogy. You do get slightly better service from a bank if you're a big depositor, free checking and such. Maybe someday I'll find out if you get a better interest rate. Certainly not 100 times more in your example.
I don't think the fact that cost is an element people consider when hiring a surveyor equates to cost being the only consideration. One-time clients might work that way, not knowing that there are differences in the level of service from firm to firm, but repeat clients operate more on the basis of service, knowing that the cheapest guy is not always the best value. There is a limit to how much the other professions can charge. You might be the best dentist, doctor, lawyer in the state but if you charge twice as much as anybody else, people will consider that in their decision to hire you. If their fees were regulated to be the same, the level of service would be the only consideration, but do we really want that?
I think realtors do look at the potential commission when they decide what market to concentrate on. Don't you suppose they would rather show expensive houses with full 6% commissions if given a choice over a dump with a lower commission?
I must be missing some advantage to the percentage idea, because intelligent people bring it up every so often. I just don't see other professions (or trades) taking the element of cost out of the equation entirely. Maybe it's because in CA, the survey is not generally linked to a real estate transaction like it is in other places. People get a survey here when the need arises, not because they have to in order to buy a home. Interesting topic, but I still need more convincing.
