Do I Need a Real Estate Survey?

When purchasing real estate, some lenders will require a survey of the property.  With most investment, short-term and hard money loans however, the survey is optional (as with cash purchases).

The cost of a survey is typically fairly minimal, a couple hundred dollars.  When the property is waterfront, heavily wooded, rough terrain and/or especially large, the survey can run into a few thousand dollars.  

By getting a survey, you not only see your property lines, you also see any encroachments, easements, infringements or right-of-ways on the property.  Encroachments and infringements can pose problems that you may want to have corrected prior to closing on your purchase (such as a neighbor's shed on the property).  Easements and right-of-ways are generally not problematic; however, they are good to know, especially in the case of a flag lot or a piece of property with development potential.

Case in point:  a real estate investor purchased a single family home on a nice corner lot from a woman who had inherited the property from her father.  The house next door had been inherited by her brother.  Their father built both properties back in the 1950's.  The investor felt a survey wasn't necessary as the property had been in this family for over 1/2 a century and per the deed, title work and city tax records, this property conveyed with "lots 10 and 11".  The investor closed the purchase, rehabbed the property nicely and proceeded to quickly find a qualified buyer.  When the buyer's survey was done, it showed that lot 10 encompassed the corner portion of the  property and lot 11 sliced through the middle of the structure.  The investor only owned 1/2 of the house!  The city tax records and deed were incorrect and had been so for years.  The brother next door owned lots 12 & 13 which included his home plus 1/2 of the property in question.  Apparently, the brother and sister had a falling out and the brother was not willing to just "give up" his 1/2 of the house.  The sale fell apart and a legal battle ensued for well over a year until the real estate investor and the brother reached a financial settlement.  With the legal expenses and holding costs for the property, the investor ended up losing money on what he thought would be a good real estate investment.

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