A residential real estate survey helps buyers learn the exact boundaries of their property and potential problems with land use. It also helps the title company guarantee the seller’s ability to convey a clear title to the buyer.
- A survey is a legal document that shows the boundaries of a given property. This includes encroachments and easements.
- You need a survey when you want to make improvements to the land you own or buy a new property.
Surveys are precise legal documents that can uncover boundary issues. They are also integral for a real estate transaction. They provide legal documentation to show that the seller can convey a clear title to the buyer.
What is a Residential Survey?
There are many kinds of surveys, but for residential property, most people use either a location or a property survey. Many times, mortgage companies require a location survey, and your title company will order it. Property surveys are more precise, and homeowners generally get them when they make improvements.1
Location surveys are the most inexpensive type of survey. Mortgage companies often require them before they will make a loan. That is why they are also called mortgage surveys.
- It shows the location of improvements in relation to property boundaries.
- It costs between $200 and $500 in most cases
This type of survey will determine if the improvements on your property (or the property you are buying) are within setback restrictions and if they encroach on another property. It may also uncover easements, encroachments, and other issues with your neighbors.
A property survey is more detailed, exact, and expensive. For house purchase, you probably won’t need this type unless you plan on making an improvement to the property. For instance, you may look at the fence and decide you need a new fence after you move in. On the other hand, you may want to add or replace a deck, build a shed, or add a room. For these projects, you need a property survey. These include:
- A history of the property
- An Exact, legal definition of the property boundaries.
- Any encroachments, easements, or rights-of-way that exist
Because it is so much more involved, you should expect to pay more than one thousand dollars for this survey. Furthermore, depending on how complicated the project is it may cost several thousand dollars.
What is the Best Survey to Have When Buying a House?
When you buy a house, you will get a residential location or property survey. If you don’t think there will be any boundary issues with any of the neighbors and you won’t make any improvements to the property soon after you move in, then the location survey is best.
If you suspect that there may be a boundary dispute or if you want to make an improvement, then you should talk to your title company about getting a property survey. While this is more expensive, it is also more in-depth and precise.
Do I Really Need a Residential Survey?
The answer to this question is it depends on your situation. If you get a mortgage and the bank requires it, then you must pay for one. Beyond that, if you live on a property that does not have clearly marked boundaries, then you should get a new survey whether your lender requires one or not.
However, you may live in a community where the property boundaries are clear. In this case, it may not be as important. Also, if the owner has a recent survey then it may not be necessary to get another one.
A Residential Real Estate Survey Helps Buyers; or is it a Waste of Money?
A residential real estate survey helps buyers. It is not a waste of money because it provides peace of mind that there is not a major problem. They commonly uncover problems with encroachments and setbacks that cost a lot of money to remedy. Therefore, it provides a low-cost way to ensure that your property does not have any serious boundary issues.
Even if boundaries are well defined a survey may uncover encroachment issues that the owner may not know about. Further, a neighbor may make an improvement that encroaches on the property you want to buy. Any time you or a neighbor makes a property improvement there is an opportunity for a boundary problem. A survey will uncover this.
Why Does a Title Company Need a Survey?
Since the title company ensures that you get a clear title to the house you buy, it wants to make sure that no changes to the property affect this. A survey is an important tool to determine that the land hasn’t been altered in a way that will cloud the title. The survey gives the title company several important pieces of information:
- Confirms the correct ownership of the property
- Confirms the property’s dimensions
- Shows easements
- Shows encumbrances
The title company can’t ensure the title without this information. Also, they want a new survey, preferably within six months of closing, to show that improvements either by the current owner or the neighbors don’t affect the integrity of the property’s boundaries.
In some cases, they will accept an old survey with an affidavit that the property hasn’t been altered. However, they view this as less than ideal because it is self-serving for the party that ordered the survey. Since it was executed for a previous transaction, it places a third-party liability issue on the new buyer. Even with the affidavit, this is not ideal for the title company. Finally, the old survey doesn’t attest if adjoining landowners made changes to their property that encroach on the property.2
Final Thoughts on if a Residential Real Estate Survey Helps Buyers
A residential real estate survey helps buyers in two ways. It ensures that there are no issues with boundaries. It also is a major component for the title company to ensure that the seller can convey a clear title to the buyer.