To start, there are many different types of surveys that can be ordered, but for the purposes of this article we are primarily referring to residential property surveys, specifically a house location survey (“Survey”). This Survey identifies the physical boundaries of the subject property and the home’s placement within those boundaries. It also shows important physical features such as driveways, sheds, fences, pools, decks, out buildings and notes any encroachments, easements or rights of way on record. Simply put, it shows you exactly what you are buying. This is important because in real estate, what you see is not always what you get. Fences, landscaping, or structures such as sheds and pools should never be used to determine the property’s boundary lines. Doing so can result in your inheriting a whole host of headaches, such as a boundary dispute with the neighbors or the costly fees of moving expensive pool pumps or fences to comply with the actual lot lines. This information about your property is not available in the public land records or from any other reliable source, even if the property in question has a recorded plat or survey.
If these problems are identified through a Survey before settlement you have some options. You can choose to walk away from the transaction or negotiate with the sellers for a reasonable cure. Sellers who are put on notice of an encroachment or other survey related issue are usually motivated to reach a fair compromise since they would likely have to remedy it on any future transaction with subsequent prospective buyers.
However, if these problems are identified after settlement, you, as the buyer, may inherit those issues and the expense associated with remedying them due to the doctrine of caveat emptor or buyer beware. Virginia is a caveat emptor state. This places the burden of conducting a thorough investigation of the property and discovering any defects on the buyer – the law will not provide relief to a buyer who fails to do their due diligence.
Similarly, a title insurance company will not provide relief to a buyer who fails to do their due diligence. Many people do not realize that there is a relationship between their title insurance policy and a Survey. Title insurance is an insurance product that protects a buyer’s legal interest in a property. As with all insurance policies, title insurance policies contain certain exceptions. One such exception is for matters of Survey. This means that if you opt not to get a Survey and an issue arises that could have been discovered by a Survey, you are on your own. On the other hand, this Survey exception is deleted from your title policy if an accurate Survey is obtained.
There is no such exception on the lender’s title insurance policy – all lenders receive protection under the lender’s policy for any survey issues, even in the absence of a current survey. For this reason, your lender may not require a survey of the property. However, the lender’s policy only protects the lender’s interest and investment, not yours as the buyer. Accordingly, if you wish to receive the same level of protection as your lender, you will need to get a survey, even if one is not required by your lender.
Failure to obtain a Survey prior to settlement can have some serious consequences. If you are buying a home and are interested in procuring a Survey keep in mind that Surveys take time – you will need to arrange for it to be done as soon as possible. For this reason, at Vesta Settlements we generally default to ordering a Survey for our buyers for any Virginia properties that are one acre or less in size. If buyers would like to opt out, they must do so within a specific period of time. For properties that are greater than one acre in size, we will get a quote from the surveyor and present it to our buyers with information about the benefits of getting a survey. Buyers will then need to affirmatively notify us if they wish to proceed with the Survey. We have developed relationships with several third-party surveyors who are able to provide quality services to our clients. However, our service of ordering surveys for buyers is complimentary, we do not receive any commission for ordering the surveys.
The fee for the Survey will vary depending on the size of the property and is usually rolled into closing costs which are paid for at settlement. If the seller of the property is able to furnish a current Survey, defined as not more than 10 years old, and provide an affidavit at closing verifying that the Survey accurately depicts the current condition of the property, the buyer can use the seller’s Survey to obtain coverage for matters of Survey. This knowledge can also help a buyer’s agent looking to help a budget conscious client save money in their closing costs, or a seller’s agent hoping to advertise the use of a seller’s Survey to entice more buyers and/or use it in their negotiations with a buyer’s agent.
In sum, getting a Survey provides you with peace of mind. While it is perfectly natural to assume that everything within the fenced perimeter of a home conveys with the property, that is not always the case. Obtaining a Survey allows you to be confident that you know what you are purchasing and that you are protected by your title insurance should an issue arise, assuming, of course, that no other coverage exceptions apply. For more information, check out our Home Purchase 411 Guide1 and 5 Reasons to Purchase A Survey handout2 under the Downloadable Docs section of our website.