Best Practices for Handling Texas Survey Issues in Property Sales

Survey problems kill more Texas real estate deals than financing failures. They surface at the worst possible moment. Everyone’s committed, emotionally and financially. Then the survey reveals the neighbor’s driveway crosses the property line.

Why Survey Issues Destroy Transactions

The Timing Problem

Most survey issues emerge within two weeks of closing. Buyers finally order surveys when they’re confident the deal will close. Sellers have already made moving arrangements. Everyone assumes it’s done.

Then reality hits:

• The five acres advertised is actually 4.2
• There’s a pipeline easement nobody knew about
• The fence everyone relied on is 15 feet off
• Improvements encroach on setback lines
• Access roads cross neighboring properties

The emotional response often determines whether deals survive. We’ve watched sophisticated investors walk from profitable deals over minor encroachments. We’ve seen first-time buyers proceed despite major boundary issues because they’d already fallen in love with the property.

The Leverage Game

When surveys reveal problems, leverage matters more than law. Has the buyer’s option period expired? They might lose earnest money if they walk. Has the seller already purchased another property? They might accept unfavorable terms rather than risk their own transaction falling through.

Title companies become creative problem-solvers or deal-killers, depending on relationships and risk tolerance. What one title company rejects, another might accept. The underwriter’s mood that day might matter more than the actual risk involved.

These practical pressures often override legal rights:

1. Emotional investment in the property
2. Moving deadlines and logistics
3. Interest rate locks expiring
4. School enrollment deadlines
5. Backup offers waiting

Common Survey Problems in Active Sales

Fence Line Discrepancies

The most common Texas survey issue. That “good fence” between neighbors sits on the wrong property line. Texas law on fence ownership and boundary establishment is complex enough that most attorneys avoid definitive answers without significant research.

For residential properties, the market has developed standard responses. Gaps under two feet often get ignored or handled through simple agreements. Larger discrepancies trigger price adjustments based on square footage lost or gained.

Commercial properties require more formal solutions:

• Written boundary line agreements
• Title insurance endorsements
• Escrow holdbacks for resolution
• Post-closing indemnifications

Rural properties present unique challenges. Is the fence on your property or theirs? Who maintains it? Can you move it? The answers affect value and future use.

Easement Discoveries

Different easements create different problems, and buyers react differently to each type.

Utility easements rarely kill deals unless they prevent planned improvements. Most buyers accept them as necessary evils. The main concern becomes whether you can build that pool or addition where planned.

Access easements are more problematic:

• Impact privacy and exclusive use
• Create ongoing neighbor interactions
• May increase liability exposure
• Often poorly documented

Pipeline easements generate fear disproportionate to actual risk. Recent pipeline incidents make buyers nervous, even when risks are minimal. We’ve seen buyers walk from properties with dormant pipeline easements that haven’t been used in decades.

Conservation easements can destroy development value even when development was never realistic. Buyers see lost opportunity, even if they had no development plans.

Acreage Shortages

Standard TREC contracts allow termination or price adjustment when surveys show material differences from represented size. But “material” isn’t defined, leading to disputes.

Is 2% variance material? What about 5%? 10%? Every transaction becomes a negotiation. Sellers argue the shortage is minimal and doesn’t affect value. Buyers claim they’re getting less than promised and demand compensation.

The advertised size creates psychological anchoring:

• “5 acres” sounds substantial
• “4.7 acres” feels like a loss
• The 0.3-acre difference might be unusable ravine
• But buyers fixate on the number

Resolution Strategies That Work

Immediate Response Protocol

When survey issues surface, your first moves matter most. Stop and breathe. Avoid making commitments or admissions until you understand the full scope. Survey problems often appear worse initially than they actually are.

First 24 hours are critical:

Document the discovery immediately. Create a written record of when and how the issue was discovered. Note who has been notified and what specific problems the survey reveals. This timeline becomes crucial if disputes escalate.

Gather all relevant documents:

• The new survey report
• Previous surveys if available
• Purchase contract and amendments
• Title commitment and exceptions
• Any neighbor communications

Categorize problems correctly. Boundary discrepancies need different solutions than easement conflicts. Encroachment issues require different approaches than acreage shortages.

Title Company Solutions

Title companies have become creative at keeping deals alive. They’re in the business of closing transactions, not killing them. Understanding their flexibility helps craft solutions.

Common workarounds include:

1. Survey endorsements – Additional coverage for minor issues
2. Indemnity agreements – Sellers protect title company from claims
3. Escrow holdbacks – Money held pending resolution
4. Limited coverage – Insuring everything except the problem area
5. Alternative underwriters – Shopping for more flexible coverage

The key is presenting solutions, not problems. Come to the title company with proposed resolutions. Show them how to get comfortable with the risk. Make it easy for them to say yes.

Financial Adjustments

Price reductions based on lost square footage are common, but calculating fair adjustments isn’t straightforward.

The simple pro-rata calculation (total price divided by advertised acres times lost acres) often doesn’t reflect reality. Is all land equally valuable? The house lot is worth more than back acreage. Road frontage has premium value. Wetlands might have negative value.

Creative financial structures help deals survive:

• Seller credits at closing for resolution costs
• Price reductions reflecting actual impact
• Post-closing obligations with financial penalties
• Shared resolution costs when both parties benefit
• Insurance requirements protecting buyers

Sometimes the seller agrees to cure the problem post-closing. This requires careful documentation and often escrow holdbacks to ensure performance.

Professional Dynamics During Disputes

Real Estate Agent Challenges

Agents want deals to close. They’ve invested time, emotion, and money. They’ll minimize issues, suggest compromises, and pressure parties to “work it out.”

But they often don’t understand legal implications:

• The “simple” boundary agreement might be unenforceable
• Suggested price reduction might not reflect actual damages
• Their timeline might violate contract requirements

The best agents recognize their limitations. They facilitate communication without providing legal solutions. They keep parties talking while professionals work on resolutions.

Scripts that help agents navigate survey issues:

• “This is more common than you think, and we have options”
• “Let’s get professional input before making decisions”
• “I’ll coordinate between all parties while we find solutions”

Surveyor Constraints

Surveyors operate under professional standards that limit flexibility. They won’t be able to move boundaries to match fences just because everyone agrees. Surveyors should not ignore easements because nobody uses them. They can’t certify to conditions they haven’t verified.

Understanding these constraints helps set realistic expectations:

Surveyors CAN:

• Explain their findings clearly
• Provide historical survey analysis
• Offer professional opinions on discrepancies
• Testify as expert witnesses if needed

Surveyors CANNOT:

• Provide legal interpretations
• Resolve boundary disputes
• Ignore professional standards
• Change findings to help deals close

Attorney Involvement

Attorneys enter when problems exceed agent capabilities. Early involvement prevents mistakes that become expensive to fix. Late involvement limits options and increases costs.

The cost of attorney review during negotiations is minimal compared to litigation expenses. A few hours of legal time during the transaction can save tens of thousands later.

Effective attorneys balance legal rights with practical realities:

1. Understand the business deal, not just legal issues
2. Provide solutions, not just problem identification
3. Navigate between parties, not inflame disputes
4. Focus on closing, not perfect legal outcomes

Negotiation Psychology

Seller Mindset

Sellers consistently undervalue problems on their property. They’ve lived with issues for years without problems. The fence has always been there. Nobody uses that easement. The shortage is just woods anyway.

The endowment effect makes sellers believe boundaries extend wherever they’ve maintained. Surveys showing otherwise feel like theft. “That’s my land!” becomes the emotional response to legal reality.

This emotional response must be addressed before rational negotiation begins:

• Acknowledge their feelings of loss
• Explain legal versus practical ownership
• Focus on solving problems, not blame
• Provide face-saving exit strategies

Buyer Reactions

Buyers experience loss aversion when surveys reveal less than expected. The psychological impact of losing something they thought they were getting exceeds the actual value difference.

Common buyer concerns that need addressing:

• “Are there other problems they’re hiding?”
• “What else might be wrong?”
• “Can I trust anything about this deal?”
• “Am I being taken advantage of?”

Managing these emotions while protecting buyer interests requires skill. Validate concerns while maintaining perspective. Not every problem requires perfect resolution.

Making Decisions Under Pressure

When to Proceed

Some survey issues don’t justify termination. Minor encroachments with title insurance coverage. Unused easements with minimal practical impact. Small acreage variances on large properties.

Evaluate actual versus perceived problems:

Questions to consider:

1. Will issues affect your intended use?
2. Can title insurance provide adequate protection?
3. Is the financial adjustment fair?
4. Are resolution costs reasonable?
5. Will problems affect resale value?

Sometimes proceeding with known issues beats starting over. The next property will have its own problems. Perfect properties don’t exist.

When to Walk

Some problems are deal-breakers:

• Major structures encroaching significantly
• Unresolvable access issues
• Environmental hazards discovered
• Title insurance unavailable
• Seller unwilling to negotiate

When survey issues reduce value beyond acceptable limits, termination makes sense. When resolution costs exceed benefits, walking away is wise. Don’t let ego and emotion override rational analysis.

The Bottom Line

Survey issues don’t have to kill deals. With proper response, creative solutions, and professional guidance, most problems are solvable.

The key is acting quickly, thinking creatively, and maintaining perspective. Not every problem needs perfect resolution. Sometimes good enough really is good enough.

But when survey issues threaten your transaction, professional legal guidance becomes essential. The cost of expertise is minimal compared to the cost of mistakes. If you need help navigating property disputes, surveys, or mineral rights Texas regulations, the experienced team at Daughtrey Law Firm can provide informed, reliable guidance.