January 2015 – Survey Size Matters

Why Survey Your Mountain Land Purchase?

When it comes to surveying land – size matters.  Listen to what one very dissatisfied landowner told us.  In his first call, he said he wanted to sell his 314-acre land parcel.  We suggested he have it surveyed before putting it on the market.  Two months later he called back.  He had the property surveyed and learned that he only owned 205 acres.

He asked what he should do.  We then asked whether it had been surveyed when he made the purchase several years earlier.  His answer was “No!”.  We asked why he had not had the land surveyed.  His answer?  “Because the previous owner told me it was a really good deal”  Apparently he had never heard the phrase “caveat Emptor” (Let the buyer beware) .

“It Was a Really Good Deal”

Of course it was a good deal – for the owner who sold it to him!  This property owner learned a vary hard lesson.  So, why is a survey so important?  Most properties that were purchased 10, 20, or 5o years ago may or may not have been surveyed at that time.  Those that were surveyed were surveyed using less than accurate measuring instruments, probably even before personal computers were in use.  Surveys performed prior to about 1980 were hand-drawn with the acreage calculated manually using “plane geometry”  Remember, there were also no hand-held calculators available until post 1970 or so.  In short, most of the older surveys were not accurate.

Don’t Cut Corners – Always Survey!

When making a land purchase – always survey.  Keep in mind that the present owner’s deed may describe the property as being 103.5 acres, more or less.  The owner’s deed may even refer to a previous survey done in 1963 by John Doe, Registered Surveyor, and describing in detail the 103.5 acres.  Take that “with a grain of salt”, but insist on having it surveyed now – with today’s accurate measuring instruments.  As it turns out, a new survey may show the original one to be fairly accurate – perhaps being 104.1 or 102.7 acres.  That slight difference is understandable considering it was done by a different surveyor using different instruments.  A new survey almost always has some variation from the original.

Often, however, there may be an error in the earlier survey, resulting in a substantial change in actual acreage present on the property.  If you offer to pay a fair price for 103.5 acres, but then learn you are only getting 96.1 acres, you aren’t likely to want to pay for the inequity of acreage – which can create a disagreement with the existing landowner.

What’s the solution?

When buying mountain land, you can eliminate potential problems by taking two actions: 1) have a new survey performed on the property, and 2) add a simple paragraph under “Other Provisions” in the purchase contract.  Those two actions will insure that you are only paying for the exact acreage included in the purchase.

Assume that you are paying $414,000 (4,000 per acre) for the property, and having it surveyed.  Include the following paragraph in the purchase contract:

“Buyer is to have property surveyed at Buyerr’s option and expense prior to closing.  If survey shows more, or less, than 103.5 acres, purchase price is to be adjusted at the rate of $4,000 per acre for each acre, or fraction thereof, more or less than 103.5 acres.”

Get Insurance!

Most land buyers ask their attorney to provide Title Insurance, as protection against possible undiscovered faults or flaws in the title to the land.  There are actually two levels of protection available.  Normally, title insurance protects against flaws in the title.  You can get added protection by asking for title insurance “as to matters of survey”.  It may cost a little more, but it also insures that your new survey is accurate.  You can even further protect your new survey from question by permanently recording a certified copy of the survey at the county courthouse. Doing so is like staking out a claim for the whole world to see that this is YOUR PROEPRTY.

Ready to Buy Mountain Land?

We can help!

 

 

2014 Price Report

What happened to land prices in 2014 depends on whether you are buying or selling. Asking prices for land here in the mountains spiked in July of 2009. That’s when asking prices for 100+ acres in Watauga County (Boone area) reached an all-time high of $42,211 per acre. Note that this was the highest average ASKING price, not selling price. In Wilkes County, the highest asking price for 100+ acres hit $11,200/acre. In Ashe, it was in the $17,000-$18,000/acre range.

Needless to say, buyers called it quits and went back home without making a purchase. Now, all that has changed. Beginning 2 weeks before Christmas last year – 2013 – with prices beginning to recede from their all-time highs, land buyers began to creep back into the land market – slowly at first, and then in increasing in numbers as 2014 reached December 2014.

Land asking prices in each of the counties we serve have now moderated back to pre-2007 levels for the most part, and land buyers are noticing. The stage is now set for the next up-cycle in the ever-recurring land market. Our price/sales cycles usually run in 6-8 year patterns. Since the bottom of the cycle was reached a year ago, we are already at the end of the 1st year in the next up-cycle.

We expect that the current low prices will continue to be available for another 3-9 months, after which, they are likely to slowly increase as buying activity strengthens. Thus, for the serious land buyer, there is still time to capture an excellent property at the pricing “bottom”. Come Spring, however, all bets are off – so consider this our “word to the wise” buyer. Carpe’ Diem!