Do I really need a survey?
Austin, TX · Member since 2016 · 160 posts · 39 votes
Do I really need a survey?
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Surveyor · Naples, FL · Member since 2015 · 46 posts · 28 votes
9y@Helen Zhang I know you have a title policy and title insurance. That is not what I meant by insurance. As a surveyor I see title issues all the time. For example let's say the previous owner of 20 years has let kids use a path through their property to get to school from the neighborhood. The path does not show up on any documents in the public record but a survey would show the path as an access to your property and would hopefully trigger an investigation as to what it is and why it is there. That path could have become a prescriptive easement through use. Now you have to let them use the path because they have a legal easement through use. Same can happen with a driveway, a fence, a shed and any other improvements or use. If you read any title policy it automatically has a survey exception that it will not insure anything a survey would have shown - it is in every single one. The only way to get that exception removed is to have a survey. So really if you're going to invest thousands of dollars as a down payment - or 10's if not 100's of thousands of dollars into a purchase - why not spend a thousand or 2 to know what you are getting actually matches what your documents say. Or perhaps more importantly that there are not issues that are not in your documents you don't know about. If you think you have a claim against you title insurance you better hope it is not an issue a survey would have disclosed or they will NOT pay your claim and will be stuck with a devalued and in very extreme cases worthless piece of property.
@Dustin Haviland - buying a metal detector and finding a piece of pipe or rebar in the ground may be more dangerous that not doing anything. Inevitably you will end with oh hey here's a pipe that must be my corner. You run out to home depot buy and install your fence to find out later when the surveyor comes out that your corner is 4 feet over there and your rebar used to hold up that tree in the corner when it was a sapling.
@Vinod Dasani - if you bought that property with the plan to add square footage as part of your strategy not getting a survey could bite you in the butt. What happens when you go to do the project and find out the building is 8" into a setback. The city/county says well if you want to improve the property you have to bring it in to compliance. that could mean modifying the structure to not be in the setback or buying a strip of land from the neighbor. Most people don't budget for those types of things when analyzing a deal.
One more thing while I am on my soap box - please don't rely on owner survey affidavits. They are, in my opinion, a bunch of crap. I'm sure I will get beat up by attorneys and title people for this. The reason I think they are crap is that they basically ask a lay person (the current owner) to give a professional opinion (survey) about a transaction they have a vested interest in (the sale). How does a owner know that no title issues have occurred? Hell half of them didn't even know they have title insurance or what it is for. They just sign the affidavit as one of the 20 signatures at closing using some 10 year old survey that does not show the neighbors beautiful new horse barn that is 3 feet on your property. Or worse yet if they know the barn is over the property line and sign the affidavit anyway (good luck proving that) what are you going to do when the title insurance doesn't pay because well we have the affidavit - are you going to sue the previous owner. Good luck and you probably didn't have those attorney fees in your pro-forma when you bought the deal either.
Bottom line - just spend what really is usually peanuts overall in the deal and get a survey done. If for no other reason - at least it protects you from your title insurance playing the survey exception card to not pay a claim. Plus it just lets you know what it is you are buying - in the real world on the ground - not what you think you are buying based on documents. The documents do not always tell the truth and the whole truth.
28 Replies
- Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes9y
Do you want to know what you're buying?
- Surveyor · Naples, FL · Member since 2015 · 46 posts · 28 votes9y
@Helen Zhang if you want to know exactly what you are buying and that there are no title issues that a survey would disclose then you should. Really a small price for insurance against a title claim or some unknown easement that blows up your deal down the road.
- Austin, TX · Member since 2016 · 160 posts · 39 votes9y
@David Dachtera I disagree. What you are buying should be clearly stated in title. The lot can be found in public record. I don't think survey is helping to define anything that you are buying other than clear borders.
@Dave Dagostino The title insurance is not the land survey that I'm referring to. I do have title commitment and title insurance. The land survey gives you the clear "borderline" of the land which is already documented in public record. I wonder what is the purpose to hiring someone to pull that public record and turn that thing into report and give to me.
- Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes9y
What's documented is what's documented. What's staked out is the only true reality. The two may or may not agree with each other. That's why you have a survey: to make sure that what's documented reflects the true reality.
- Title Representative · Indianapolis, IN · Member since 2016 · 64 posts · 41 votes9y
@Helen Zhang Dealer's choice. I would say that answer is case by case. Are you putting up a fence? Are the property lines concerning with any out building or a neighbor? If the survey is returned and your property line is moved +/- 5 feet, heck +/- 10 feet will that have a monetary impact on the purchase? Is there specific concern with the property that deems necessary to order a survey? Then the question is stake survey or survey report. Survey report is only reasonably accurate. Stake survey is costly. Buy a metal detector and locate the stakes yourself.
- Investor · Sugar Land, TX · Member since 2017 · 89 posts · 43 votes9y
@Helen Zhang - I haven't got a survey in the past for cash deals. As long as the Title is clear I went ahead with the deal. However, I did end up getting a survey done a couple years later on 1 of the properties as I was looking at increasing the size of the building. Its easy to do later if needed.
- Surveyor · Naples, FL · Member since 2015 · 46 posts · 28 votes9y
@Helen Zhang I know you have a title policy and title insurance. That is not what I meant by insurance. As a surveyor I see title issues all the time. For example let's say the previous owner of 20 years has let kids use a path through their property to get to school from the neighborhood. The path does not show up on any documents in the public record but a survey would show the path as an access to your property and would hopefully trigger an investigation as to what it is and why it is there. That path could have become a prescriptive easement through use. Now you have to let them use the path because they have a legal easement through use. Same can happen with a driveway, a fence, a shed and any other improvements or use. If you read any title policy it automatically has a survey exception that it will not insure anything a survey would have shown - it is in every single one. The only way to get that exception removed is to have a survey. So really if you're going to invest thousands of dollars as a down payment - or 10's if not 100's of thousands of dollars into a purchase - why not spend a thousand or 2 to know what you are getting actually matches what your documents say. Or perhaps more importantly that there are not issues that are not in your documents you don't know about. If you think you have a claim against you title insurance you better hope it is not an issue a survey would have disclosed or they will NOT pay your claim and will be stuck with a devalued and in very extreme cases worthless piece of property.
@Dustin Haviland - buying a metal detector and finding a piece of pipe or rebar in the ground may be more dangerous that not doing anything. Inevitably you will end with oh hey here's a pipe that must be my corner. You run out to home depot buy and install your fence to find out later when the surveyor comes out that your corner is 4 feet over there and your rebar used to hold up that tree in the corner when it was a sapling.
@Vinod Dasani - if you bought that property with the plan to add square footage as part of your strategy not getting a survey could bite you in the butt. What happens when you go to do the project and find out the building is 8" into a setback. The city/county says well if you want to improve the property you have to bring it in to compliance. that could mean modifying the structure to not be in the setback or buying a strip of land from the neighbor. Most people don't budget for those types of things when analyzing a deal.
One more thing while I am on my soap box - please don't rely on owner survey affidavits. They are, in my opinion, a bunch of crap. I'm sure I will get beat up by attorneys and title people for this. The reason I think they are crap is that they basically ask a lay person (the current owner) to give a professional opinion (survey) about a transaction they have a vested interest in (the sale). How does a owner know that no title issues have occurred? Hell half of them didn't even know they have title insurance or what it is for. They just sign the affidavit as one of the 20 signatures at closing using some 10 year old survey that does not show the neighbors beautiful new horse barn that is 3 feet on your property. Or worse yet if they know the barn is over the property line and sign the affidavit anyway (good luck proving that) what are you going to do when the title insurance doesn't pay because well we have the affidavit - are you going to sue the previous owner. Good luck and you probably didn't have those attorney fees in your pro-forma when you bought the deal either.
Bottom line - just spend what really is usually peanuts overall in the deal and get a survey done. If for no other reason - at least it protects you from your title insurance playing the survey exception card to not pay a claim. Plus it just lets you know what it is you are buying - in the real world on the ground - not what you think you are buying based on documents. The documents do not always tell the truth and the whole truth.
- Investor · Sugar Land, TX · Member since 2017 · 89 posts · 43 votes9y
@Dave Dagostino - My post was discussing my past experience. And as I mentioned in my post a few years down the road I decided to extend the building. At the time of purchase if I had any plans to expand the property I would definitely order a survey. Dont get me wrong if the owner has the survey or if I can get them to pay for it I would definitely get it. Moreover, its not too expensive to get a survey done. In my case it cost between $500-700 to get the survey.
- 9yPeter TverdovBusiness MemberDeveloper · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
I think it depends on the property (huge lot, farmland? yes. dense urban area with clearly defined boundaries, meh)
- Member since 2016 · 13k+ posts · 12k+ votes9yI agree completely with Helen Zhang. What is already on file is sufficient and should be all you need unless you are purchasing with the intent to expand the building, install fences etc. If your investment is only with the idea in mind of having the property remain as is a new survey is not necessary.
Unless this is a newly divided property with a new building then the survey is already in existence and registered. It would be a unnecessary expense.
- Surveyor · Naples, FL · Member since 2015 · 46 posts · 28 votes9y
@Thomas S. - Some parts of Ontario (not sure where you are) use a Torrens Land Title System where the government basically guarantees title through a registration of deeds/surveys. Not applicable in the US. We do not register land title or surveys. In US you hold fee simple title to land.
- Palmetto, GA · Member since 2016 · 27 posts · 11 votes9y
My 95 years-old mother has owned some farmland for many years. Recently I prevailed on her to get a new survey.
The survey showed that an adjacent landowner had encroached over our property with their field.
That was bad enough because had we not found that out, we could have left ourselves exposed to an adverse possession action.
Worse, though, was the fact that someone had created a "baited plot" to hunt deer on the portion of our property where the encroachment was taking place.
Had we not addressed the issue with a letter of notice to the adjacent land owner and dealt with the baited plot, we could have easily run afoul of wildlife protection laws.
Another issue is making sure that a complete site assessment be done. It's not unusual for the dumping of barrels of toxic chemicals is done on remote farm and timberland.
Don't buy an EPA site remediation action when you buy your farmland.
- Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes9y
BRAVO Dave! I'm not a surveyor, but as an investor I see folks (mostly other investors) step over a dollar to save a dime and many of them will call me to help them figure out how to get out the mess they created. I just bought a house (minimal as it may be) for $5K...and yep, I'm getting a survey because I MUST know what land I'm buying since I'll immediately re-sell it. Risk should not be undertaken without knowing all the facts on what the risk is and doing all one can to mitigate it. I like to sleep well at night and the small cost of a survey helps me do so.
- Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes9y
Originally posted by @Thomas S.:
I agree completely with Helen Zhang.
What is already on file is sufficient and should be all you need unless you are purchasing with the intent to expand the building, install fences etc. If your investment is only with the idea in mind of having the property remain as is a new survey is not necessary.
Unless this is a newly divided property with a new building then the survey is already in existence and registered. It would be a unnecessary expense.
So, you don't care about unrecorded encroachments, previously inaccurate surveys, ... ?
- Surveyor · Naples, FL · Member since 2015 · 46 posts · 28 votes9y
Thanks @Guy Gimenez - It just baffles me why people put money at risk - sometimes very substantial amounts - on deals and not spend the few bucks to get a survey done to make sure there are not issues.
- Investor · Los Angeles County, CA · Member since 2012 · 962 posts · 279 votes9y
Originally posted by @David Dachtera:
What's documented is what's documented. What's staked out is the only true reality. The two may or may not agree with each other. That's why you have a survey: to make sure that what's documented reflects the true reality.
Helen you should listen to David's advice unless you want to trip over dollars trying to pick up pennies.
You could get BURNED not doing proper due diligence. There could be some serious issues from property lines, encroachments etc that won't show up on title.
If it's a small amount of land in a typical area you could try to measure yourself but I wouldn't do it unless you're super experienced.
If it's empty lot or something seems odd about the layout I would definitely do a survey.
It's kind of up to your risk tolerance and experience. - Austin, TX · Member since 2016 · 160 posts · 39 votes9y
@David Dachtera @Dave Dagostino @Dustin Haviland @Vinod Dasani @Peter Tverdov @Thomas S. @Dan Scarborough @Guy Gimenez @Will F.
Thanks for all the collaboration. I like when we have this type of discussion. I apologize for not giving everyone the complete information.
1. The property is located in a city (not crazy wild farm land with 0 borders) with HOA.
2. I am not looking forward to do any exterior constructions (expansion, fences, second backyard house...etc).
3. It is not a property that is newly divided or newly constructed.
I'm a strong believer of every single penny should not be spent if it's not necessary, and our real estate is being built on top of funds of every penny that we have saved.
Regardless how much it cost to do a survey (even if it only cost a penny to do it), I would like to know whether it s a necessary step to do in my situation.
Here is my simple counter-argument to "must purchase survey" (as I am playing devil's advocate):
When I had to take out a mortgage, I don't recall any bank requires a land survey. I don't consider myself as a smart investor (who have seen it all), and I do think banks are likely to be smarter as they invest in massive mortgages (as they have a million cases in order for them to implement the *relatively* well-rounded investment process). If a land survey is not required in their standardized processes as a necessary item, why should it be a necessary item in my book?
Again, what I am referring to is residential single family home.
- Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes9y
The point remains that should an encroachment or some other issue be discovered later on, you will have no recourse and title insurance likely won't cover it.
If you want to get to closing only to have the title agent say, "Oh, by the way - the lender didn't receive your plat of survey", that's entirely up to you. It not needed to vet you as a borrower. It may be needed by underwriting, and they may - quietly - expect that it will be in the closing package they receive from the title company.
You're not a lender - you're a property owner. If you don't care to know what you own, that's your choice.
If you enjoy hassles and other difficulties, then by all means - step over $1,000 bills to pick up pennies.
If penny-pinching is THAT important to you, you may want to reconsider REI - it may not be for you. REI is not for the miserly. The most successful REIs are the wise investors - INVESTORS, not penny pinchers.
Best of luck to you!
- Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes9y
I know people that sell their homes by general warranty deed too. But all it takes is one issue to arise that can wipe out all the gains on several properties and it's no different with surveys. I won't try to sell you on getting a survey as it appears your investment strategy is working for you...well, for now.
I just had an investor friend get a survey and found a small portion of his lot encroached on the neighbor's property...been that way for 40 years. Will that be disclosed on the subdivisions plat? Nope. He was smart enough to get a survey and an endorsement on his owner's policy that covered the encroachment. Now the neighbor is ready for payday and the title company will have to ante up to move the entire house over 18" to eliminate the encroachment. $30K cost to the title company which would have been the buyer's problem had he not gotten a survey and properly addressed issues in his commitment.
- Surveyor · Naples, FL · Member since 2015 · 46 posts · 28 votes9y
Surveys should just be a cost of doing business. It is just something that is done and is figured into the cost of any deal.
Just my 0.02
Good luck on your project!
- Austin, TX · Member since 2016 · 160 posts · 39 votes9y
I appreciate your time in answering questions, and I think I stated earlier that I am a cash investor. So the way how I invest, should be at the same line on how the bank operates (except the bank is investing in loans and property and I'm only investing in property). I'm sorry I don't think I can completely buy your point. But thank you for your contribution.
@Guy Gimenez , the property has general warranty deed. Not special or quit. That's an interesting story about the existing buildingon the property. I see where you are coming from.
- Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes9y
You might also want to think about a buyer down the line who may be more skittish, if not scared off by the lack of a survey on the previous (your) purchase. If you'll go to that length to cut corners, what else might you have missed or glossed over? If the documentation is wrong, they'll be "inheriting" problems you chose not to discover.
Speaking for myself, I'd be asking for a price concession to cover my potential risks if I were your buyer.
- Austin, TX · Member since 2016 · 160 posts · 39 votes9y
@David Dachtera , fyi I am the buyer =)
There are costs that come with due diligence that are necessary and there are costs that come with due diligence that are great to have. You are welcome to even hire an attorney to inspect the property to ensure absolutely nothing is wrong with your title to guarantee that it is 120% what you are buying is what you are expecting. But the truth is we do not need that 20% extra guarantee.To me, if I can guarantee it up to 99.9% that what I am buying is what I am expecting, is good enough.
A survey in an established neighborhood that is cut in squares for all the houses in the neighborhood falls under that 0.1% that I, as an investor, will not pay for. There is always a chance that I will fall into that 0.1%, and I am willing to take that risk. If I were to purchase 1000 houses, I am gladly to run into that problem with that one house =)
- 9yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
@Dave Dagostino Great answer, Dave.
We constantly deal with residential buyers who refuse to purchase a survey.
They save ~$200 (this is the average cost of a location drawing) in and in the process expose themselves to huge potential liabilities. I never understand this. They spend half a mil plus on a house and don't seem to care what they're getting.
And lenders are OK with this -- they force title to eliminate the survey exception in lenders policies so it doesn't affect them.
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