In Florida, the title underwriter will usually accept the seller’s land survey, and most people don’t take it any further. Why should they if it’s one less cost for the buyer to worry about? Well, there are a few reasons someone might want to be more prudent.
A new boundary survey is typically considered a closing cost that a buyer will cover. Sometimes, when a buyer is under the strain of a tight budget, they may want to cut down on closing costs.
However, plenty of horror stories exemplify the risk involved in overlooking a new land survey. Ultimately, it can cost a new buyer thousands of dollars and countless weeks to sort out the related issues with survey lines.
What Is a Land Survey?
Land surveying is a scientific technique used to determine property points and distances between them. These points are then used to establish land maps and create boundaries. A land survey will reveal the exact property dimensions, size, and location of the home on the property, as well as any other improvements on the land.
Most surveys are requested when financing land or a home, before construction, when dividing a parcel of land for sale or if there is a conflict in use on your property.
A Real-Life Story
In 2009, the president here at PropLogix purchased an 11-year-old home in a planned community. There had been two other homeowners before him. Like many people, he opted to use the seller’s survey – the original from 1998 provided by the builder. The seller signed a no-change affidavit promising they had made no improvements or changes, so he had no doubts that the survey would be accurate.
In 2014, when he went to sell his house, he found out otherwise. A new survey showed a surprising fact; the boundary line cut right through my pool and lanai. This meant that most of his backyard was considered common space, and he didn’t own the water access or the 80 feet of seawall.
To remedy the issue, the original builder, the HOA, and attorneys had to get involved in a process that took three whole months.
Why Homeowners Should Be Concerned About Surveys
While many homeowners are unaware of the need for a survey until it’s time to plan for an addition, a pool, or other related home improvements, there is a need for concern related to past homeowners as well. These are the unintended costs for buyers and real estate professionals when you don’t get a new survey.
Time and Aggravation
If you’re the seller just now finding out there are boundary issues, you’re going to have to go through the ordeal of making it right in order to sell the property. In my situation, I could never have imagined it would take so long to fix the problem and how many parties would have to be involved – it would be a frustrating ordeal for anyone to endure.
Losing a Buyer
Three months is a long time. One of the worst-case scenarios would be that a buyer decides it’s not worth the wait or that they can’t wait. Many buyers are working on a time crunch and the likelihood that they would be able to afford to stick around for three months is slim. Finding a new buyer means more time and money for you. Furthermore, title insurance can’t help you with this cost — you’re alone.
Why Real Estate Agents Should Be Concerned About Surveys
Homeowners aren’t the only ones who should be concerned about land surveys. As a real estate professional, it’s your duty to protect your customers, and a land survey is no exception. If you want to provide a great experience for homeowners, consider these reasons for urging them to obtain one.
Regardless if title insurance is going to cover the problem, going through the headache of having to resolve this issue and potentially losing a buyer makes for an aggravated customer. They may feel like you let them down. It’s going to leave a bad taste in their mouth, and it’s possible they may never use you as a resource again.
A Costly Title Claim
If the builder didn’t have original plans available, or the HOA wasn’t cooperative, I could have had to rip up and relocate the pool and lanai. Plus, because I paid for a home that had water access, I’d file a claim for that, too.
Four Reasons to Get a Land Survey
1. Home Improvements
The best way to be sure that your client can make this new property into their dream home is to ensure that all the grand plans they have are feasible. If they’re buying a property with hopes of constructing an addition, building a greenhouse out back, and putting a pretty picket fence up — it’s important to know if they can do these things. An updated survey will ensure that their high hopes fit into the bounds of what they’re getting. It’s important to note that if they have plans for improvements, they should be getting the correct type of survey.
2. Past Home Improvements
Let’s be honest with ourselves. Sellers are great, but many are operating in the interest of making sure that their home sells. That means it’s possible some sellers may not disclose changes made. Or maybe the current seller didn’t realize the person they bought the property from made improvements that could be problematic.
3. Land Surveys Can Be Wrong
Not every surveyor is created equal. Some are more thorough than others. If you really want to know what you’re working with, does it really hurt to get a second opinion? If that survey you’re going to use is 10+ years old, that means the property hasn’t had a fresh pair of eyes in so many years.
Even though the title insurance still covers it, do you want your client to go through the headache of finding it was wrong? Having to live through the hassle of fixing it (i.e. listening to a jackhammer blast through a concrete parking pad that’s 3 ft into their neighbor’s yard) is an unpleasant experience. Also, this is a massive investment for a buyer, and there is no replacing doing your own due diligence.
4. Owner’s Title Insurance Doesn’t Cover Boundary Issues
Even though an underwriter may still issue a homeowner’s title insurance policy with a survey from the previous owner, this doesn’t mean that the new owner will be covered for title claims relating to boundary issues like encroachments, land use obligations, legal description errors, and undisclosed easements.
These issues will be listed as exceptions in the title commitment. Usually, the only way to remove these exceptions with your title insurer is to obtain a new land survey.
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