What is a property survey?
A property survey is usually required by the settlement agent/attorney responsible for closing a property purchase transaction. The agent/attorney must have an accurate survey to issue a title policy which includes survey coverage. This protects the buyer and lender. A survey includes a legal description, property address, and locates all improvements, i.e. home, driveway, sidewalk, fence, and also shows easements for power or gas utilities, or any road access to an adjoining property.
How does a survey benefit me?
A property survey verifies the location and dimensions of all boundary lines, and identifies any potential encroachments, i.e. structures that extend over boundary lines onto a neighboring property. A survey includes other measurements also, like the distance between a dwelling and road. Surveys are often reviewed by contractors before making improvements to confirm setback or other code requirements.
A survey verifies acreage
It’s critical to have a survey done when buying a property. A seller may misrepresent boundary lines, intentionally or unintentionally. You may be told you’re buying 2 acres and a home. Without a survey to verify the exact property dimensions, you can’t be certain the parcel is in fact 2 acres. It’s important to know all boundary line dimensions, and have all corners flagged or pinned for future reference.
A survey reveals flood zone data
A survey will reveal if a property is located in a Flood Hazard Area. If the property is in a Flood Hazard Area, order a Flood Elevation Certificate. This certificate will show the Base Flood Elevation and show the Base Floor Level of the home. If the floor is below the Base Flood Elevation determined by a Current FEMA Flood Map, you will need Flood Insurance. For more details visit: https://msc.fema.gov/portal
Know the boundary lines of your new property.
You’ve found the perfect property and you’re really excited, but it lacks a fenced-in yard for your dog. Ok, you reason, you’ll get bids to put up the fence. But wait! Can you even erect the fence, and what are the legal boundary lines of your new property? Where do they start and stop? There are additional considerations. Do you know where all the power lines and easements are located? Where are your new neighbors' property boundaries?
It's prudent to have such key information in hand before you close on the purchase. You’ll also need to know if you can add on to your home in the future, as there are probably community setback rules. What about easements, rights-of-way, joint driveways, party walls, underground drains, elevations, and so much more. The information also could affect your future listing if you think you own more land than you legally do when you go to sell.
Many fail to have a land survey done before closing. They may not want to take the time or spend the money, unless they’re required to have a survey by their lender. Some people simply accept the information the seller provides based on a casual conversation, handshake, or a very old survey handed to them.
Beware. Information provided in such a casual fashion may be outdated or erroneous, as properties are bought and sold multiple times and changes could have been made to the property. Worse, such information could be based on falsified facts to make a buyer think a property is better in some way than it is, to bring a higher price. Talk about a migraine!
There are scenarios that could come back to bite you if you don't obtain a survey before signing on the dotted line at the closing. Imagine that you’ve decided to build a playhouse on your new property. You’re told by your community building department that you must obtain a survey and file a building permit to erect the playhouse structure. The new survey is done and it reveals that your new neighbor’s fence is actually ten feet over onto your property line, and now you have to ask them to move their fence. A survey done prior to closing would have clearly shown the fence was encroaching on the property and the problem could have been addressed by the seller and any real estate agents involved. Now it’s your problem.
In recent years, these type instances have happened quite often, as some lenders don't require a survey to secure a mortgage. That’s the case in Michigan, says broker Ann Peterson of Ann Peterson Realty Services in Rochester, Michigan, who also serves on her state's Realcomp MLS Board of Governors. "There have been many instances in the last few years where older properties have sold and new purchasers renovate or tear down existing homes without surveys having first been done. I've seen firsthand what has happened when these properties are finally surveyed, and we find there are encroachments from tree plantings, fences, or garages of neighboring properties. It causes heartache, hardships, and ill feelings," she says.
“It’s amazing what can show up in a survey,” says Holly Bry, a St. Louis residential sales specialist with Gladys Manion Inc. She advises all her buyers to have surveys conducted, although it’s not legally required in her state of Missouri. “Once I had a buyer with a contract on a property where the survey showed the newer detached garage was built in the utility company easements. If the utility companies ever needed to use the easement, the garage would have had to be torn down. That buyer was very glad they had the survey performed and found this out before going through with the purchase of this home!”
As a result of these scenarios, Peterson is now finding that more buyers are requesting a survey before they purchase and close. For a survey to be thorough, Peterson thinks it should trace the land and plat or map back as far as possible, so everyone knows the exact boundary lines, location of power lines, and all buildings. Then, if problems arise, the seller has to fix them, or have a neighbor correct them. When differences can't be resolved, a seller may need to take legal action, but at least it's not at the buyer's expense. If getting a survey is part of a sales contingency, the buyer can walk away from the transaction if what's provided isn't satisfactory and can't be resolved.
Exactly who provides a survey and what does it include? There are "land surveyors" that specialize in this work and provide findings to the buyer, seller, and lender involved in the transaction. The survey will include the exact location of the property with a legal description and street address, any additions made to the site or separate structures such as a pool or garage, and any fencing. The survey is based on the original recorded plat and shows boundaries of parcels with streets, alleys, easements and rights of way and will indicate changes made over time, says Mel Joseph, president and owner of KEM-TEC in Eastpointe, Michigan. His company always asks for a copy of the title insurance policy (see the blog about Title Search) when completing the survey, which also shows every easement recorded, such as those for power or gas lines.
The survey will also show if the site is located within a flood hazard area, according to FEMA's current flood map data, which will indicate the need for flood insurance, Joseph says. Search online at: https://msc.fema.gov/portal.
The cost of a survey depends on a number of factors from the size of the property to the amount of detailed information requested, and the particular survey company selected. Joseph's firm generally charges between $150 and $255, he says. Bry estimates the cost in St. Louis to be $500-plus. “When I place the order for the survey with the title company, I ask for an estimate to provide to my buyer,” she says.
The buyer typically pays, but in a soft market the seller may agree to do so to encourage a sale. And even if a survey was recently done, many buyers may still request a new survey if their attorney or real-estate agent doesn't know the company that conducted the prior survey or determines it lacks proper detail, Joseph says. He has sometimes advised a buyer to have an existing survey emailed to him, so he can check whether it's adequate, or he will have a field crew drive by to see if any important changes seem to have been made that might dictate a new one.
In all cases, it’s best to act carefully, even if it seems difficult or unnecessary, to avoid problems down the line. Your ultimate goal as a buyer is to have a "clear title" without any problems related to who owns what and what was done to your soon-to-be property.
Why a buyer needs a survey for new construction or an existing home:
Craig Pryde, principal at KTGY Architecture + Planning, an architectural firm in Chicago, shared the ways a survey can help guide the design of a new house and bring to the surface problems with an existing one, all of which a prospective homeowner should know before buying a house:
- Zoning laws will dictate whether homeowners can build what they want or whether they'll need to make changes to their plans because of restrictions;
- A flood plain may pose some issues regarding the site improvements and fill required to elevate the new home;
- A wetland may also present challenges i.e. you might have water problems forever, or the EPA may declare the wetland as protected and forbid building on it. These issues must be mitigated before the design and construction proceeds;
- Easements may pose building restrictions;
- Subdivision regulations may also limit designs for a new home and a survey of the area may influence the placement of a home on a particular lot.
- Site and yard restrictions affect the expansion or redevelopment of a home; also the existing topography surrounding the home may indicate potential drainage problems to be verified;
- Access from the street, parking, or a garage all need to be determined, as well as entrance into and out of the property; does it exist or must access be addressed;
- An existing layout may need to be altered. Does the home's structural integrity and framing system permit this, and fit with the existing topography shown on the survey?
- Utilities may be another challenge since older homes may have under-sized water or electrical service, both of which may cause problems for a new owner. Old HVAC systems may also need to be replaced. Will new systems fit into the existing outdoor areas?
Barbara Ballinger is a professional writer, author, blogger and speaker who has long focused on real estate, design, and personal finance. She has co-authored many books, including Successful Homebuilding and Remodeling, The Kitchen Bible: Designing the perfect culinary space, and The Garden Bible: Designing the perfect outdoor space. She regularly contributes to the National Association of Realtors® Website and magazine.
Margaret Crane is a nationally known freelance writer, blogger and journalist who has co-authored with Barbara Ballinger several books and articles on real estate, design and family business. Her byline has appeared in Realtor® magazine. With more than a half-dozen titles to her credit, Margaret’s latest design book is The Kitchen Bible: Designing the perfect culinary space.