A Physical Survey is a survey of your property that shows the existing condition and improvements. If your property has been surveyed in the past, it is possible that there may be a plat recorded in the courthouse. Often times, these previously recorded plats do not show all information about your property like recent changes. If there has been an addition, new driveway, sidewalk, shed, garage or any change to the property, the recorded plat will not reflect this.
The most common mistake made by home buyers is not having a survey done prior to purchasing property.
Why is this a mistake? Without a survey you have no recourse if at a later date it is found that your fence encroaches on a neighbor’s land or that there are rights to easement by one of the service companies (this means that an electric, sewerage or water company has access rights to your property to carry out maintenance and repair). Consider the examples where a property owner has built a garage over part of the access rights, these service companies have then been known to remove the garage to carry out maintenance if required.
However, most problems arise when improvements done to the property such as patios, pools, drives, garages and building additions are either outside the building limits or encroach on a neighbor’s property. A Physical Survey would DEFINE the dimensions of the lot and the POSITIONS of platted easements and building limits. Very importantly, they OUTLINE any improvements (garage, pool, patios, house, drive, etc.) and show whether they encroach upon a neighbor’s property, outside building limits or create a barrier to access.
Physical Survey— why doesn’t the Bank, Mortgage/Lender company request one?
Simply put, they insure themselves against any future problems that arise due to not requiring a survey prior to purchase. Look at the small print of the Buyer’s Title Insurance policy and you will find that exceptions are found in every title policy.
These are the standard exceptions:
• Survey matters
• Taxes or assessments
• Rights or claims of parties in possession not shown by public record
• Mechanic's liens not shown by public record
So, if the title insurance excludes protection against Survey matters, (boundaries, access rights, building limits), who is responsible for these if a problem arises after you purchase the property? YOU! That’s right, those clever Mortgage companies who lend to thousands of home purchasers every year know the value of excluding Survey matters in any title insurance policy.
Before 1997, every Mortgage/Lender required a mortgage inspection, a survey on a property before they would provide a loan. The Lenders wanted to make sure that their investment was protected from claims made as a result of access rights or encroachments. You do as well, right?
Then, the title companies granted insurance to the lender even without a survey because the insurance protected the lender’s interest in the event of a claim being made that a prior survey would have shown. But, it does not protect the buyer’s interest because the Buyer’s Title Insurance policy has the exclusions shown above. Therefore, the buyer has no protection against the forced removal of a garage or a neighbor claiming increased boundary rights. Effectively the risk was passed to the buyer, YOU!
Why did this change happen? Simply to speed up the process of buying and selling houses as it is in everyone’s interest, except the buyer, to cut corners where possible. Consider the Real Estate agent who wants a quick sell to get his commission, the lender who wants the buyer paying interest on a loan as soon as possible, the Title Insurance company who wants payment for insurance coverage as quickly as possible and the seller who wants the funds. So, this small change in the insurance policy accelerates the process to the benefit of everyone except the buyer.
The best advice we can give is, for a very minimal cost, a Land Survey is a very good value for your money and investment. If defects are found you can use these findings as leverage to lower the purchase price or to make a more informed decision protecting your investment or purchase another more suitable property.
If you cannot afford a Physical Survey we suggest contacting us for a payment option or some other way to cover your cost.