Do I Need a Real Estate Survey?

Well, it’s a judgement call.

By Tina Merritt

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

The cost of a survey is typically fairly minimal, a few hundred dollars. If 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: An 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 half a century, and per the deed, title work, and city tax records, the property he was purchasing the entirety of the woman’s lot. The investor closed the purchase, rehabbed the property nicely, and proceeded to quickly find a qualified buyer.

When the buyer’s real estate survey was done, it showed that the correct property line sliced right through the structure. The investor only owned half the house! The city tax records and deed were incorrect and had been so for years. The brother next door owned a larger part of the overall property, which included the investors home.

The brother was not willing to just, “give up” the half of the house that now technically belonged to him. The sale fell apart, and a legal battle ensued for well over a year until the 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.

In the end, while a real estate survey may not be required, it may be a wise investment.

Tina Merritt specializes in working with real estate investors, and has been licensed since 1998 in both Virginia and North Carolina. Tina is “Mom” to Goliath, the English Bulldog, who can usually be found napping in the window of the Nest Realty office in Blacksburg. 

Photo credit: Hugo Chisholm