One of the most common questions asked during the closing process is “Does my client need a survey?” In a nutshell, a survey is always highly recommended; but is it always necessary? Yes and no.
So, when is a survey required? Typically, when a lender is loaning money for the buyer to purchase the home, or a borrower to refinance their property. While many lenders do not require the physical survey itself, they do require the Title Company/Attorney to insure a boundary survey as part of their lender’s title insurance policy. The only way a Title Company/Attorney can do so is by having an actual survey to review; hence the need for the survey.
So, when is a survey not required? When a buyer pays cash for a property, they are not required to obtain a survey. Their owner’s title policy can list this an exception so that the owner can bypass the need for a survey. Also, condominiums- not townhouses- condominiums do not require a survey because they cannot be surveyed on an individual property basis since they are structured like apartments.
So, how can a buyer save some money if a survey is needed? Buyers have 2 options for getting a discounted survey:
- Survey Re-certification (discounted charge): They can find out who the surveyor is that last surveyed the property and request a re-certification. Sometimes, though, this can cost just as much money as a new survey.
- Survey Affidavit (free of charge): They can ask the seller if they still have a copy (or could easily obtain one) of their existing survey to do a survey affidavit if the following 3 requirements are met (ALWAYS check with your Title Company/Attorney to see if they will accept an existing survey and what their requirements may be as they differ company-to-company):
- The survey is less than 20 years old.
- No changes have been made to the property since the survey was completed. Meaning, no additions or removals whatsoever.
- The seller is willing to sign a Survey Affidavit attesting to #B at closing.
Well, that’s the 4-1-1 on survey requirements, but are they really needed? Yes! A survey tells you so much about the property lines, legal description, and where things are located within your property. Surveys can shed light on many potential issues such as incorrect legal descriptions, and encroachments. These issues can lead to hefty legal expenses if not known prior to closing, and not insured. By having a survey done before closing, it allows the buyer time to address potential issues with the seller (at their expense) prior to closing so the buyer isn’t left with issues after closing. The downside when issues are found, closing can be delayed depending on the severity of the issues. However, it always better to delay closing and fix issues than to close and hope that an issue never evolves later when trying to sell.
Sadly, boundary issues have left many families with tragedy over the years. People get very territorial when it comes to their land. It’s sad to think how many tragedies could have been avoided with proper boundary surveys completed. When making the biggest investment of your life, a few hundred dollars is a small price to pay to insure your property lines. As a Realtor, if you are uncertain if your client needs a survey, always check with the Title Company/Attorney; never rely on the advice of a lender or outside party, as they are not the ones ultimately responsible for making sure the closing is handled correctly. Not ordering a required survey can delay closing further, so be sure before you decide not to order one that it is absolutely not needed. When a survey is required, be sure to order it in plenty of time so the Title Company/Attorney has adequate time to review and advise of any potential issues. Nothing is more frustrating than getting a survey the day of closing only to find out the house was built on the wrong lot, and closing is cancelled.
Author: Jessica E. Bennett, Licensed Title Agent
DISCLAIMER: The information provided in this article are for informational purposes only and not for the purpose of providing legal advice. The opinions expressed at or through this site are the opinions of the individual author, and may not reflect the opinions of the firm or any individual attorney.