title insurance survey on a MHP

Developer · Austin TX - San Jose, CA · Member since 2016 · 66 posts · 45 votes

I am negotiating to purchase a MHP in Northeastern Oklahoma. A provision in the contract states that buyer will pay for title insurance and a title insurance survey. I've never encountered a title insurance survey provision before, although i've only ever bought/sold residential homes. I've heard that sometimes ALTA surveys can be close to 20k.

Is an expensive survey like this necessary for a commercial purchase like this? Is there a specific type of survey I should be looking for. I won't be looking to mine or extract natural resources, nor will I be trying to redevelop the land.

Is it reasonable for the buyer to be responsible for the entire cost or should this be a seller cost or a split cost?

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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
7y
This isn't just referring to a title search which would be requisite for issuing title insurance?
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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
7y
Is this something the lender is requiring? Because title insurance is not required to buy property. A good idea? yes, but not required.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
alta policies insure encroachments etc. so yes if the title company is worried about this they will order a survey of the property before they issue and alta.. you can use a CLTA and that does not insure boundries etc.
20,000 for a survey is WAAAAAY high unless there are not controls to go off for the surveyor and he has to pick up known points 5 miles away or something..
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Andrew Brewer
OP
Developer · Austin TX - San Jose, CA · Member since 2016 · 66 posts · 45 votes
7y
I haven't reached the financing portion of it yet. I will be looking for bank financing and have a financing contingency in the contract. I assume a lender will want title insurance though and even if I was doing cash or seller finance I would still want title insurance just in case.

Originally posted by @John Teachout:
Is this something the lender is requiring? Because title insurance is not required to buy property. A good idea? yes, but not required.

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Andrew Brewer
OP
Developer · Austin TX - San Jose, CA · Member since 2016 · 66 posts · 45 votes
7y
It sound then like a survey is up to the discretion of the title company issuing the insurance policy? The seller claims that she paid for a survey before and it cost 17k and then she was bitter that the buyer walked and she had to eat the cost which is why she is wanting me to pay for my own as an insurance policy that i won't rack up another cost like that for her and then bounce.

Do you have any resources where I could learn some more about these surveys and the costs? I've never encountered it before.

Originally posted by @Jay Hinrichs:
alta policies insure encroachments etc. so yes if the title company is worried about this they will order a survey of the property before they issue and alta.. you can use a CLTA and that does not insure boundries etc.
20,000 for a survey is WAAAAAY high unless there are not controls to go off for the surveyor and he has to pick up known points 5 miles away or something..

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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
7y
Ok, you're referring to a land survey of the property? That shouldn't cost 20k unless it's a 15,000 acre ranch or something. A property survey around here is about $700.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Andrew Brewer:
It sound then like a survey is up to the discretion of the title company issuing the insurance policy? The seller claims that she paid for a survey before and it cost 17k and then she was bitter that the buyer walked and she had to eat the cost which is why she is wanting me to pay for my own as an insurance policy that i won't rack up another cost like that for her and then bounce.

Do you have any resources where I could learn some more about these surveys and the costs? I've never encountered it before.

Originally posted by @Jay Hinrichs:
alta policies insure encroachments etc. so yes if the title company is worried about this they will order a survey of the property before they issue and alta.. you can use a CLTA and that does not insure boundries etc.
20,000 for a survey is WAAAAAY high unless there are not controls to go off for the surveyor and he has to pick up known points 5 miles away or something..

sure.. if she paid 17k for a survey then of course its a RECORD of Survey with monuments and recorded at the county.. title should be able to pull that survey.. then they send out a title officer and look at the points .. worse case U have to find the property corners were the iron rebar is and flat them.. and in this survey there will be monuments at the property corners with the surveyors number on it.. this is very is surveying one oh one.. of course I spent half of a career selling rural and ranch land north of SF so pretty familiar with it. and in our day job of developing subvisions we have to survey and record plats on each one and monument each lot corner.

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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
7y
If the survey is already complete, there is no reason to duplicate the work and the cost. At most the survey may need to be updated, but if recent enough title could rely upon a survey affidavit.
If there is a lender involved, you aren’t closing without an ALTA survey... around here title can’t issue a policy with a survey exception on commercial property and removing that would require an ALTA.
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Dan Wallace
Golden, CO · Member since 2016 · 145 posts · 61 votes
7y
Budget and expect to get a survey. Surveys typically come into play when a lender requires certain exceptions to be removed from a title policy. You may ask whether a survey has been complete since many sellers have completed a recent survey as part of the selling process. Otherwise, reach out to come survey companies in advance and inquire as to the expense.
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