You bought a house with a detached garage and a gravel pad wide enough for two cars. The appraiser walked it, photographed the garage, and used comps that all had off-street parking. Then the title commitment came back and the legal description on it covered the house lot only. The strip the garage sits on is a separate sliver that the seller’s grandfather picked up in 1974 and nobody ever merged into the main parcel. It is not in the deed you are about to receive.
Nothing is wrong with the house. The problem is that the paperwork and the dirt have come apart, and a lender can only lend against the dirt the paperwork describes.
What a legal description actually is
The address is not the property. The tax parcel number is not the property either. The property, for every purpose that matters to a loan, is whatever the legal description in the deed says it is.
Descriptions come in three common forms. A lot and block reference points at a recorded subdivision plat: lot 14, block 3, of the Edgewood Plan, as recorded in plan book 22, page 41. A metes and bounds description walks the boundary in words, so many feet at so many degrees from a stated starting point, corner by corner, back to where it began. A reference description points at an earlier recorded deed and adopts its description by citation.
All three are text. None of them is a picture, and none of them is a measurement of what is standing on the ground today. That gap is where the trouble lives.
The four ways the description and the dirt come apart
In practice almost every mismatch is one of four things.
The description is short. It covers less land than the seller has been using and less than you are buying. The garage strip above is the classic version. So is a back yard that was extended into an abandoned alley forty years ago without any deed ever being recorded.
The description is long. It covers land the seller no longer owns, usually because a piece was carved off and sold and the remaining deed was never updated. You end up with a deed that purports to convey a neighbor’s side yard, which is a defect even though it sounds like a bonus.
The description does not close. A metes and bounds call has a typo in a bearing or a distance, and when a surveyor plots it the boundary does not return to its starting point. A description that does not close describes no land at all with certainty.
The description points at the wrong thing. A reference description cites a prior deed that was itself corrected, or cites a plat that was later revised, and the chain now carries two different versions of the same boundary.
Separately from all four, the house itself can be standing partly outside whatever the description covers. That is an encroachment rather than a description problem, and it behaves differently in underwriting. We have written about what a lender does with an encroachment separately, because the fix and the insurance treatment are not the same.
Why the title policy follows the description and not the house
This is the part investors consistently get wrong, and it is the whole reason a lender cares.
A loan policy of title insurance insures title to the land described in Schedule A. It does not insure the building, the driveway, or your expectations. If the description omits the garage strip, the policy omits the garage strip. If a dispute arises over that strip two years later, the insurer’s answer is that it was never covered, and that answer will be correct.
So when the title agent compares the description against the survey and finds that they disagree, the commitment comes back with a requirement, not a note. The requirement says the description has to be corrected before the policy will issue. Some boundary risks can be insured over with an endorsement, but a description that omits land you are paying for is generally not one of them. There is nothing to endorse. The land is simply not in the policy.
A lender will not fund against collateral the title insurer will not insure. That is the entire mechanism, and it is why a problem that sounds like a clerical matter stops a closing cold.
The worked file
Run it with numbers, because the ratio is where the mismatch actually costs you.
Purchase price 265,000 dollars. Twenty five percent down, so a loan of 198,750 dollars at 7.25 percent on a thirty year amortization. Principal and interest comes to about 1,356 dollars a month. Taxes run 3,600 dollars a year, or 300 a month. Insurance runs 1,500 dollars a year, or 125 a month. Total payment, 1,781 dollars.
Market rent with the garage and the parking pad is 2,250 dollars. That gives you 2,250 divided by 1,781, a ratio of 1.26. Comfortable. If you want to see how the ratio moves on your own numbers, the full walk-through of how to calculate DSCR shows the arithmetic, and the DSCR deal calculator will run it for you.
Now take the garage strip out, because that is what the deed does. The appraiser is asked to re-value the property as described, without the detached garage and without off-street parking. On a street where every comp has at least a pad, that is not a small adjustment. Say the value comes back at 248,000 dollars and the appraiser’s market rent opinion drops to 2,025 dollars, because a tenant pool that has to park on the street pays less.
Two things happen at once. The ratio falls to 2,025 divided by 1,781, which is 1.14. That still clears a 1.10 threshold but it has eaten your entire cushion. And the loan amount falls, because seventy five percent of 248,000 dollars is 186,000, not 198,750. You need 12,750 dollars more cash on a deal you already underwrote, on three days’ notice, for a garage you thought you were buying.
That second number is the one that kills deals. The ratio problem is survivable. The cash-to-close problem usually is not, because the money is already committed.
How it gets caught, and the cases where it does not
The mismatch surfaces in one of three places.
The title examiner catches it when the prior deeds in the chain do not describe the same land. This is the most common and the earliest, which is good, because early is cheap.
The surveyor catches it when asked to plot the description and stake the corners. This is the most reliable catch and the most expensive, because a survey costs real money and takes real time. Whether your purchase needs a new survey at all turns on a short list of triggers, and a description that looks irregular is one of them.
The appraiser catches it almost never. An appraiser values what they are told to value and measures what they can see. If the order says the subject is the address, the appraiser appraises the address, garage included, and the report will not flag that the deed covers less.
And there is a fourth case: nobody catches it. If no survey is required, the title examiner works from the prior deed rather than from the ground, and the prior deed carries the same short description it has carried since 1974, then the defect passes through the closing untouched. You find out when you go to sell, or refinance, or when a neighbor puts up a fence. The pattern is the same one that produces an old unreleased lien: a defect that sits quietly through several transactions and then stops the one where somebody finally looks.
What the fix actually is
There are three real remedies and they are not interchangeable.
A corrective instrument from the seller. If the seller does in fact own the omitted strip, they can convey it. Usually that means a new deed with the full corrected description, or a confirmatory deed alongside the main one. This is the clean fix and it is the one to push for. The mechanics of corrective deeds, scrivener’s affidavits and re-recording are worth understanding before you ask, because which instrument is appropriate depends on what kind of error it is, and asking for the wrong one wastes a week.
A deed from whoever actually owns it. Sometimes the seller does not own the strip. It belongs to a dissolved company, a dead relative’s estate, or the municipality that abandoned the alley. Now you are not correcting a description, you are acquiring land from a third party, and that is a different transaction with its own timeline. This is the version that pushes a closing out by a month or more.
Re-scope the deal. Buy what the deed describes, at a price that reflects it, and underwrite the rent the smaller property actually commands. Unglamorous, and frequently the right answer. The property without the garage is still a rental. It is just a different rental than the one you put under contract, and the question is whether the new numbers work.
What is not a fix is a verbal assurance that everyone has always treated the strip as part of the property. Long use can ripen into a legal claim in some circumstances, but a lender will not fund on a claim that has not been established, and a title insurer will not insure one.
What it costs in time
A corrective deed from a cooperative seller who clearly owns the land: three to ten days, most of it waiting on signatures and the recorder. A new survey to establish what is actually there: one to three weeks in most markets, longer in rural ones. A deed from an estate or a municipality: a month at the fast end.
Against that, look at your contract. Your financing contingency has a date on it, and the date your contingency expires is what actually puts your deposit at risk, not the date the lender finishes underwriting. A description problem discovered eighteen days into a thirty day contingency is an extension conversation, and the extension has to be asked for before the clock runs out rather than after.
There is also a document in your closing package that touches this directly. The compliance agreement lets a lender correct clerical errors after closing and have you re-sign. Investors sometimes assume that covers a description problem. It does not. A compliance agreement is for scrivener-level slips in the loan documents, not for changing what land secures the loan. If the description is wrong, it gets fixed before funding or it does not get fixed.
The check to run before you write the offer
Three things, and all three are free or close to it.
Pull the current deed from the county recorder and read the description. You are not checking the surveying. You are checking whether the description sounds like the property you walked. A one-paragraph metes and bounds call on a house with a garage, a side lot and a long driveway deserves a second look.
Compare the tax parcels to the footprint. If the assessor shows two or three parcel numbers for what looks like one property, you are in multi-parcel territory, which has its own financing structure, and you want to know that at offer time. The same goes for the reverse case of two dwellings sitting on a single deed. Municipal boundaries are worth the same glance, since a property straddling two townships gets two tax bills and an escrow nobody sets up correctly.
Ask the listing agent one question: has the property been surveyed, and if so, when. The answer is usually no, which tells you the description has never been tested against the ground.
It is also worth knowing which kind of deed you are getting at closing. A general warranty deed gives you recourse against the seller if the description turns out to be defective. A quitclaim gives you almost none, and on a property with an irregular description that difference is not academic.
One more thing about boundaries moving on their own: they sometimes do. When a road project takes twelve feet of a front yard, the legal description changes by operation of law, and the deed in your file goes stale the day the taking is recorded.
After it closes
If you do get a corrective deed, confirm it recorded. A corrected description that was signed but never made it to the recorder’s office is worth nothing, and the gap between funding and recording is wider than most investors realize. What happens to your documents after the wire clears is its own sequence, and the trailing documents are where a correction either lands or quietly does not.
Then put the recorded corrective deed and the survey in the property file. The next buyer’s title examiner will find the same irregular chain you did, and the difference between a two day explanation and a three week delay is whether you can hand over the documents that resolved it.
Where we sit
A description mismatch is one of the few title problems that changes the value of the collateral rather than just clouding it, which is why it hits the ratio and the cash to close at the same time. It is also one of the most fixable, as long as it is found while the seller still has a reason to cooperate.
If you have a commitment in hand with a description requirement on it, or a deed that reads strangely against the property you walked, send it over before you start negotiating an extension. We place loans on rentals and flips across Pennsylvania and additional states, and we can usually tell within a day whether the fix is a corrective deed, a survey, or a reason to re-trade the price. Get in touch or call 412-990-2941.
FMC Capital is a Pittsburgh-based mortgage brokerage serving real estate investors. NMLS #1840537. Loan terms, rates and program parameters vary by lender and borrower profile and are subject to change. Nothing here is a commitment to lend or legal advice.