Do I really need a survey?

[Helen Zhang]

Hi BP community, 

This isn't the first time I'm doing a cash buy for properties, and I have never purchased a survey for properties before. However, this time it is different, I am buying a trustee sale. Should I purchase a survey?

I would love to hear from those of you who are also doing cash purchases. 

Helen Z

[Dave Dagostino]

@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.