Encroachment issues

Encroachment for the real estate industry is basically when your improvements are built over your neighbor’s property. This can have a big impact on whether or not you'll be able to refinance. First of all, the best way to check to see if you or your neighbor’s improvements encroach on your property line is to look your home up on your county or city website. Once you get to the website, look around for the place to type in your address. Once you get here, look for the map section. Many counties and cities now have a map section. Click on this to see an aerial photo of the address you typed in. This will show the property boundaries and the structures. If your barn, home, or any other improvements cross over into your neighbor’s property, you may have a problem that you'll have to fix.

Let me tell you a story about an encroachment issue.

Now since the outbuilding was not located all of the way on the property, I appraised the home with no value given to the outbuilding. In some cases, banks will accept this. But many banks will want you to correct the encroachment issue. In this case, there are two choices.

What is the solution?

The second choice is to get your neighbor to agree to sell you the additional property that your outbuilding sits on. In this case, you'll have to get the owner to agree to the property boundary adjustment.

Next, you'll have to get the property surveyed. And one of the most important parts is to get the county or city to record the new improvements so that when an appraiser looks up this information in public records, it will be recorded properly so that you will not have any other issues.

Now about your neighbor, many times, your neighbor will not want to do this because they are worried about the value of their property and if there will be any problems down the road when they would like to refinance or sale. You see, if the next door neighbor gives you some of the land, their land will be decreased and your land will be increased.

In this case, the zoning may restrict smaller lot sizes and so this may not even work. And if it does, your neighbor property will be too small and not conform to the current zoning laws. So this will make his property less valuable or at the least, more difficult to appraise.

As it turns out, the appraiser that appraised this for the current mortgage missed that fact that almost the entire outbuilding was located on the neighbor’s property.

So the moral of the story is do some of your own homework or you could run into problems when you're trying to sell or refinance. This is why I'm always the first to tell you that the money is made when you buy. Encroachment issues are easily found by looking on county and city websites with aerial views.

If the property you are planning to buy is close to the boundary lines, call for a surveyor to make sure you're not buying their problems.