Mortgage Surveys & Profitability

Time to move. Seriously. When everyone else is setting your prices for you, it's time to find somewhere that does not happen.

The fee that one charges can only be sustained if the market can bear it.

The market can not handle even the least modest price increase. The clients have been inundated and have become used to paying $250 to $275 for the most basic mortgage survey, here we call them certificates. Even the larger 5 acre M&B parcels less than $650.

I have cut my costs and have a real good handle on expenses, but it's like it was 20 years ago, when you could do 8 jobs a day. The market has changed but our fees have not. The market can not handle a fee increase. There are too many firms doing these types of jobs for too little a fee. My clients will not accept a fee increase. If I want to continue working, I can only charge what a wiling client will pay.

Those prices sound like the ones around my neck of the woods. The prices are about the same as they were 20 years ago. I had a quote request the other day for a 10 acre metes and bounds residential parcel with house, ponds and woods in the back that they wanted in 3 days for closing. I quoted $1200 (which I thought was pretty good for them), it ended up going for $800.

The residential survey market is almost totally a commodity market. Moreover, surveyors are not exempt from the laws of supply and demand. When you still have a good supply of boundary surveyors in your area and a low demand, prices are going to be low.

A few of the older surveyors around here do those. One advertises in the yellow pages "will beat any price". They get around 100 apiece and reportedly can do 10-20 a day (field work, map, everything). They are making money.

> ....They get around 100 apiece and reportedly can do 10-20 a day (field work, map, everything). They are making money.
But they are not likely making a good product.

I haven't done one in decades, I wonder if it's just a regional thing, the banks and title people here don't do them anymore.

Is there other types of survey jobs to be looking at there? Sounds like if they go the direction of the title companies here and just exclude coverage then that business will dry up where you are.

There is a company or two around here that are doing them for just over $100. I have only done a very small handful of them when I quote a reasonable price, mostly from out of town companies. The mortgage inspection in this area has largely gone the way of the dodo bird of late and I can't say I'm sorry to see that, though I would like to see them being replaced with a proper boundary survey.

> > ....They get around 100 apiece and reportedly can do 10-20 a day (field work, map, everything). They are making money.
> But they are not likely making a good product.

Wait a minute ... did you just use the words.... "mortgage survey" and "good product" in the same sentence?

Aren't those things covered with disclaimers that they aren't good for anything? Everybody but the public who is expected to pay for them knows that unless they are drawn on toilet paper they aren't even good for wiping your backside.

I've never been able to figure why the state licensing boards didn't raise hell to the point of getting them banned in every state. "A survey" should actually be a survey. Yes, I know they have wording on them that states they are not a survey but we all know when a surveyor hands a client a map that client thinks knows they got a survey.

Larry P

and there you have it. The Mortgage survey is not a survey at all. The product is not done professionally and I highly doubt these meet the survey standards in your state. So why do them? You make zero money, you don't protect the public and you don't provide a professional service. If I were you I would change focus and get out of that market entirely. I did and I am so much better off for it.

> and there you have it. The Mortgage survey is not a survey at all. The product is not done professionally and I highly doubt these meet the survey standards in your state. So why do them? You make zero money, you don't protect the public and you don't provide a professional service. If I were you I would change focus and get out of that market entirely. I did and I am so much better off for it.

Didn't we cover this weeks ago?

Some states have provisions and rules for mortgage inspections - so they do meet the standards of the Board.

I don't do them, but I know surveyors who do, and they aren't trying to pass them off as, or substituting them for, actual boundary surveys of the property.

This is a product separate from a boundary survey, that somehow serves some purpose to the lender. If surveyors refuse to do them, or the Board outlaws them, the lenders aren't going to suddenly start asking for boundary surveys instead - they'll get by without the inspection.

It's a good thing we're professionals

A non-professional bunch might take things into their own hands, vigilantly style.

You know, throw a stake-bag over the head of the "cheapie" offender and then proceed to beat him silly with socks full of mag nails. Probably an effective deterrent to "low-ball practices". Enough corporal consistency and the offenders' numbers would probably diminish.

Of course, professionals like ourselves would never resort to any such behavior...no matter how good the results might actually be.

> I don't do them, but I know surveyors who do, and they aren't trying to pass them off as, or substituting them for, actual boundary surveys of the property.
>
> This is a product separate from a boundary survey, that somehow serves some purpose to the lender. If surveyors refuse to do them, or the Board outlaws them, the lenders aren't going to suddenly start asking for boundary surveys instead - they'll get by without the inspection.

I don't disagree with anything you said Mr. Macolini. But that still leaves the question. In those states where these are allowed, how is the Licensing Board protecting the public?

The fact that the lenders want something cheap for their files is very true. But last time I looked it was not the job of the board to protect the lenders. It was to protect the public.

The state where I live and work (North Carolina) has never allowed these things. And yes, lenders here "get by without the inspection". And yes, a few have been burned and burned badly. That is why some lenders here are starting to see the value in a real survey provided by a professional.

So again I ask the question. How are the licensing boards in those states that do allow mortgage loan inspections fulfilling their primary obligation to protect the public?

Larry P

> Aren't those things covered with disclaimers that they aren't good for anything? Everybody but the public who is expected to pay for them knows that unless they are drawn on toilet paper they aren't even good for wiping your backside.
>
> I've never been able to figure why the state licensing boards didn't raise hell to the point of getting them banned in every state. "A survey" should actually be a survey. Yes, I know they have wording on them that states they are not a survey but we all know when a surveyor hands a client a map that client thinks knows they got a survey.
>
> Larry P

For whatever it's worth, I have heard an explanation that kind of describes the justification for a mortgage survey. I don't have to do them, so I don't really have a dog in that fight.

As it was kind of explained to me (Paraphrased).
When I buy a piece of poperty per the deed, as a professional surveyor, I can go out, look at the subdivision map or description, look up enough control to kind of figure out about where the property falls. I can (for instance) find a block corner, drag a tape down to the fence corner of the lot in the description, see if it looks about right. See if it is indeed the house that is for sale on the property. Listen for pins, and see if they fall around where they should, and make sure I am buying the product generally described in the deed. And also see if there are any improvements that look like they might cause a problem or possibly be encroaching. I can do this without actually providing a land survey.

Since the general public or the bank or the title company) doesn't have the same expertise I have, this is a way for them to hire a licensed land surveyor to "inspect" the property, and make sure that they aren't lending or guaranteeing, for instance, a piece of swamp land.

Now I don't totally like that, but that explanation kind of makes sense to me. In order to properly protect the public at large, I think there should be a different product in place, or perhaps a caveate to the same product.

One option is that if there is uncertainty in where the property lies, it should warrant a full boundary survey. The surveyor should say "I can't sign a certificate in this case because I would need to set the actual boundary to know if the improvements are close"...or whatever reason.

One real problem I see, however on this whole mortgage inspection issue, is that properties go for generations after generations of land transfers without an adequate land survey. Property corners disappear, fences move, and it is harder and harder to find control after years of original monumentation getting "obliterated" (or "lost" in the blm's definitions of the words).

I think that there should be a law on the books that requires a boundary survey every time a piece of property is transferred. That would both assure the needs of the lender and the title company as to what they are dealing with, and it would help to upgrade and/or preserve monumentation to make all surveys in the same area easier and less costly to the public. The landowner should just have a survey done, and the plat be part of the closing paperwork. Whenever they sell the property, they get the profit. If the survey discloses a problem, it can be dealt with accordingly by someone buying the property (at a price that takes the problems into account) or the homeowner rectifying the problems and getting full market value for the land.

That's my 2¢ (or is that 0.04')

I think you missed my point, even in the states that allow this type of "service", the person offering this up for $100 or $200 can not even be meeting the requirements for the "service".

they aren't Larry...

yeah, but are we all taking apples and apples here?

a very good friend and neighbor of mine- the guy who taught me most of what i know about the "surveying" end of surveying (as opposed to the software and technology end), makes his living almost exclusively off of residential title surveys. there's a commitment, there's a certification, there's a stamp and signature.

he does them at a price that has risen by maybe 20% in the past decade, and would represent a loss for me based upon the bills i have to cover. but he also works from home, has minimal overhead, and does not invest at all in technology, as there is no real applied benefit for him to do so (RTK, for instance, isn't gonna help him one bit on the 250-300 surveys he does a year). he also is one of the most conscientious professionals i've ever met, and his surveys are both competitive with the average rate around here and visually evident to be much more diligently done than most others you'll see.

i don't know what his paper income is on a yearly basis, but i know it's significantly lower than mine. that said, he maintains the same basic set of obligations and life the rest of us do, and is perfectly content with what he has- to the point of resisting job offers, more work, and ribbing from me that he should step it up to modern times.

so, i can't throw a blanket indictment at guys who do "cheap" surveys. to me, it's a matter of being in a different business.

Does anyone remember...

...an article in one of the surveying periodicals a few years ago about a fellow I believe to be in Pennsylvania? He and his wife ran a business that found a niche in these type of surveys; he ran 3-4 crews and followed them around in a van (virtual office) where the wife drove and took care of admin tasks while he was in the back drafting. They physically inspected each site after the crew was there and finalized the mapping.

I believe they were driving a customized Astro Van. Anyone have a copy of the article or a link to share?

Matt

> I think you missed my point, even in the states that allow this type of "service", the person offering this up for $100 or $200 can not even be meeting the requirements for the "service".

That's speculation. The facts are that, at least in Maine, there are companies doing this, for that price range, and are meeting the standards.

correctomundo, Mr. Solo...

Many years ago I jumped in with two other fellas as a "business venture". Two of us were licensed, one was not. We were all equal partners and needed some work. We aggressively grabbed work where we could. The two cards we tried to play heavily were our experience (we all three were "spinoffs" from the big boys, hence we knew a lot of folks) AND our low overhead.

Our office was a garage and one of the "field vehicles" had to leave at 3pm so our partner's wife could get to work. Nothing like surveying out of a "soccer-mom van" with toys rolling around in the floor board...

A couple of the guys ex-employers had PLENTY to say about our lower fees. Lotsa hard feelings and crap talk. We shot the jobs during the day and drew them up at night. We put in a lot of hours and hard work for nothing more than to establish ourselves.

It paid off. Two of us are still doing well and the third is retired. The big boys eventually quit their whining. AND our overhead eventually grew (as they ALWAYS do..)

As you pointed out, reduced fees are not in themselves an indication of poor quality or fraudulent surveys. Some folks can just get by on less. More power to them. It's the quality of the survey we need to pay attention to, not the price. Are we going to start stringing each other up simply because one's overhead is less than another's?