The Importance of a Land Survey When Purchasing Real Estate

This statement is one I hear too often—and it's one that can lead to costly problems down the road. While some lenders may not require a survey, that doesn't mean you don't need one. Learn if you need a survey. Let me explain why a survey is critical for protecting your investment.

Boundary Verification

Surveys confirm exact property lines, helping you avoid neighbor disputes and understand exactly what you're purchasing. This information proves essential for:

• Future improvements like fencing or deck construction
• Understanding setback requirements
• Identifying property dimensions
• Avoiding encroachment issues
• Planning construction projects

Without a survey, you're relying on assumptions about where your property begins and ends. These assumptions are often wrong.

Identifying Hidden Issues

Surveys may reveal "previously unknown issues, such as a neighboring property encroachment, a disputed property line, or undisclosed easements."

Common issues surveys uncover:

• Neighbor's fence, driveway, or structure on your property
• Your property improvements extending onto neighbor's land
• Utility easements restricting use of portions of your property
• Access easements giving others rights to cross your property
• Discrepancies between legal description and physical boundaries
• Encroachments from adjacent properties

Discovering these before closing allows you to:

• Negotiate solutions with the seller
• Adjust the purchase price
• Require corrections before closing
• Walk away if issues are too severe. See how encroachments are resolved.

Compliance Verification

Surveys confirm whether existing structures meet local zoning regulations and building codes. This includes:

• Setback requirements from property lines
• Easement restrictions
• Wetlands or flood zone boundaries
• Building coverage limits
• Height restrictions

Discovering non-compliant structures beforehand prevents:

• Costly future modifications
• Legal complications with municipalities
• Problems when you want to sell
• Fines or violations
• Inability to obtain permits for improvements

Title Insurance Requirements

Here's an important distinction: while some lenders don't mandate surveys for loan approval, title insurance companies have different requirements.

"A title insurance company will still insure the lender's interest in the property, but that doesn't mean the buyer doesn't need a survey."

Key points:

• Standard title insurance has survey exceptions
• Without a survey, certain title issues aren't covered
• Enhanced coverage requires a current survey
• Survey exception leaves you unprotected against boundary disputes. Understand what title insurance covers.

Investment Protection

Surveys prove invaluable for planning future improvements:

• Understanding property dimensions
• Designing new structures in compliance with local regulations
• Planning additions or renovations
• Installing pools, sheds, or other improvements
• Understanding drainage and grading

A survey is an investment in your property's future usability and value.

Types of Surveys

Different survey types serve different purposes:

Mortgage Survey/Location Survey:

• Shows property boundaries
• Identifies major improvements
• Typically sufficient for residential purchases

Boundary Survey:

• Precisely marks property corners with stakes or monuments
• More detailed than mortgage survey
• Useful for construction planning

Topographic Survey:

• Shows elevation changes
• Essential for construction projects
• Identifies drainage patterns

ALTA Survey:

• Most comprehensive
• Often required for commercial properties
• Meets American Land Title Association standards

Cost vs. Value

Survey costs typically range from $400-$1,000 for residential properties, depending on:

• Property size
• Complexity of boundaries
• Accessibility
• Location
• Age of existing surveys

What this investment prevents:

• Boundary disputes: $5,000-$50,000+ in legal fees
• Encroachment corrections: $2,000-$30,000+
• Permit problems: Priceless (can't build/improve)
• Resale issues: Could derail future sale

The survey cost is insignificant compared to potential problems it prevents.

When Lenders Don't Require Surveys

Lenders may waive survey requirements when:

• Property is in a development with recent surveys
• Purchase is a refinance (not a purchase)
• Loan-to-value ratio is low
• Property is in certain low-risk areas

But remember: The lender's interests aren't the same as yours. They care about their collateral being sufficient for the loan amount. You care about property boundaries, encroachments, and usability.

Red Flags Without a Survey

These issues often aren't discovered without a survey:

• Fences not on actual property lines
• Driveways partially on neighbor's land
• Sheds or decks encroaching on easements
• Property smaller than advertised
• Access issues
• Shared driveways without easement documentation

Recommendation

Always obtain a current survey when purchasing real estate, even if your lender doesn't require one. The cost is minimal compared to the protection and information it provides.

Work with:

• Experienced real estate attorney
• Licensed professional surveyor
• Knowledgeable title company

Together, these professionals ensure you understand exactly what you're buying and that your investment is protected.

Conclusion

Don't let your lender's requirements dictate your due diligence. A survey is one of the best investments you can make when purchasing property. It provides certainty about boundaries, reveals potential issues, confirms compliance, and protects your investment for years to come.

Contact Pete Weinman for guidance on survey requirements and other important aspects of your real estate purchase.