Is A Survey Required When You Buy A House?
Posted: September 13th, 2021
As a practical matter, most purchases are financed with a mortgage loan, and the mortgage lenders almost universally require certain elements of coverage with respect to survey matters in the lender’s policy of title insurance (a Florida Form 9 Endorsement) which the lender requires as a condition of the loan.
Most institutional lenders (generally any lender following Fannie Mae or Freddie Mac guidelines so that they can sell the mortgage on the secondary market, as most mortgage loans are) require a Florida Form 9 Endorsement to the lender’s policy of title insurance. Under state title insurance regulations, we cannot issue this endorsement without an acceptable survey of the property. Thus, for most transactions involving mortgage financing, a survey is needed.
If the buyer is paying cash, it is the buyer’s choice as to whether to obtain a survey; however, be aware that if you decline to obtain a survey, there will be a general survey exception on the title insurance policy for any matters which would have been shown by a survey of the property.
Our staff generally will NOT inquire about a cash buyer’s intentions with respect to obtaining a survey and will presume that a cash buyer is declining to have a survey done unless the buyer or the buyer’s real estate agent tells us otherwise. Thus, if you are a cash buyer and wish to obtain a survey of the property, please proactively inquire with your real estate agent or a member of our staff.
Most contracts for the sale and purchase of real estate allow the buyer to have a survey of the property conducted within a specified time period after the formation of the contract to (among other things) confirm that the boundaries of the property are in fact where the parties believe them to be, to confirm the absence or the presence and extent of any encroachments of improvements from neighboring properties onto the subject property, or encroachments of improvements from the subject property encroaching onto neighboring property, or into easements.
We do NOT monitor the contractual timeline for the buyer to obtain a survey. The buyer must monitor any such deadlines for themself.
Notwithstanding, based on our experience with problems discovered after closings when surveys were not obtained, we encourage all buyers to obtain a new survey of the property. The cost of a new survey is generally $300.00-$500.00 for a standard residential property, but like anything else, depends on the unique circumstance i.e. the unique nature of the property.
Depending on the nature and extent of an encroachment, curative action may need to be undertaken before closing, and even if any encroachments are otherwise de minimis or harmless, it is important to make a record of the layout of the improvements on the property as of the date of the survey in case any issues arise at a later date.
If you have already ordered or intend to order a new survey, please advise your closer of the name of the survey company you are using and provide contact information so that your closer may confirm needed information with your surveyor.
We can and do order surveys when requested to do so but we require the buyer to sign an authorization form in which the buyer agrees: 1) to be financially responsible for the survey and 2) to hold our office harmless for any issues with the timing of delivery of the survey vis-a-vis the expiration of the buyer’s rights to have a survey of the property performed and object to any issues revealed by the survey, etc. Click here to complete the survey authorization form.
Using ‘Prior’ Surveys
Often, we are able to use an existing ‘prior’ survey rather than require a new survey, and most contracts call for the seller to provide the buyer with copies of any existing surveys in the seller’s possession.
If there have been no substantive changes to the property since the time of a prior survey, and the survey shows the property ‘as built’ i.e. not as ‘proposed’ to be built, then generally we can use the existing prior survey.
If you intend to rely on an existing prior survey rather than obtaining a new survey, please let your closer know and supply a copy of the survey you propose to use as early in the process as possible so that our staff can review and confirm that the survey is acceptable for title insurance purposes.
As stated above, based on our experience with problems discovered after closings when surveys were not obtained, we encourage all buyers to obtain a new survey of the property. The cost of a new survey is generally $300.00-$500.00 for a standard residential property, but like anything else, depends on the unique circumstance i.e. the unique nature of the property.