A survey is a valuable tool that should be utilized when you are purchasing a piece of residential property. Many home buyers debate whether they actually need a survey during the closing process because they do not want to spend the extra money, which ranges from $300.00 and up depending on the size and existing conditions of the property. Many home buyers, especially first-time homebuyers, view a survey as something extra, more of a luxury than a necessity. Any homebuyer who has obtained a mortgage has probably been required to obtain a survey, as almost every single lender requires a survey before they are willing to lend money. The reason being, a title company cannot remove the standard survey exceptions from the title policy without a survey, and the lender cannot close with survey exceptions on the title policy. Cash buyers, or buyers using alternative financing, oftentimes struggle coming to terms with spending the extra money for a survey because they do not understand the benefits that a survey provides.

Boundary Disputes:

The most common reason a purchaser orders a survey is to determine the exact boundary lines of the property they are purchasing. Simply because a fence exists does not mean that the person who put up the fence knew where the boundary line was. A professional survey will detail whether the property you think you are buying is in fact the property you are purchasing. A valid survey could also help solve disputes over property lines later down the road. For example, if one of the neighbors attempts to add a porch, put up a fence, pave a driveway, and/or alter their property in a way that encroaches over the property line, you can furnish the survey as proof that the subject land is your property. 

Price:

Once you have found the house of your dreams, you need to come to terms on a price with the seller. The price is determined by measuring all of the factors, good and bad, for that house. Naturally, one of those factors will be the size of the property you are purchasing. By obtaining a survey during the inspection period of the contract, you will be able to verify the size of the property. If the property dimensions do not measure the size that was contracted for, the buyer can use this as leverage to obtain a reduction of the purchase price. Without a survey, it may be months or years before it is determined that you do not in fact own land that you paid for and have been taking care of. Instead of owning the land, you may find out that you have been performing free landscaping for the neighbor’s property. You do not want to find yourself ready to sell a property that you believed to be a full acre, only to realize that the fence lines are not accurate and your property is not a full acre. 

Objects Under the Soil; Easements:

Poles and above ground wires are obvious and easy to spot, but there may be other cables or wires running underneath the yard of your home. A surveyor can usually provide detailed information on the existence of underground equipment or wires. A Utility Company may have been granted an Easement (An Easement is a right to cross or otherwise use someone else’s land for a specified purpose) through or under your property. If there is a valid Easement, the utility company can potentially have a say in how you use the land where their easement lies. For example, if you decide to build an additional bedroom onto your house and you unknowingly (or intentionally) block access to the easement, the utility company may be able to legally have you remove the newly built structure. 

Additional Coverage Under Your Title Policy:

If the Buyer chooses not to obtain a survey, Title insurance does not cover any items that would have been discovered during a survey of the property. If the Buyer chooses not to obtain a survey, then later determines there is a defect that would be covered under a title policy, but decided not to get a survey which would have shown this defect, said defect will likely be excluded from coverage under the title policy. Obtaining a survey prior to closing allows the title agency or title insurer to adequately assess the risks associated with covering items disclosed on a survey, and obtaining that survey allows the title company to remove the general survey exception. This general survey exception is replaced with a specific survey exception. The specific survey exception may, or may not, exclude coverage for high risk items disclosed on the survey. However, the Buyer should be given an opportunity to review and accept or reject the coverage that is proposed by the title company. 

Conclusion:

Purchasing a home is one of the most important financial transactions in a person’s life. While a residential survey does cost an additional fee that you may not have planned for, the benefits of the survey outweigh the price. The survey will provide peace of mind, and help protect the asset that you have worked so hard for. If you are thinking about buying a piece of residential property without a survey, please sit down and research the possible complications that may arise down the road.