A property survey can cost as much $500 on top of the thousands of dollars you already pay for closing costs. Is the property survey necessary when you buy a home?
While law does not require it, your lender may require a survey before they’ll close on your loan. Even if you pay cash, you should consider a survey. The more information that you have before you buy a home, the better financial decisions you can make.
What is a Survey?
Let’s start with the basics of a survey so that you can make a logical decision. A survey is a professional drawing of a home’s property lines. It shows the home’s boundaries as well as the easements. The survey also includes a description of the property in words, to help you further understand the property’s boundaries and to determine if there are any encroachments on it.
Mortgage Lenders and Surveys
Most state laws don’t require homebuyers to pay for a survey. But, most mortgage lenders do require a survey. Lenders want reassurance that the home doesn’t overstep any boundaries. In other words, the lender doesn’t want anyone coming after you once you own the home because it puts the mortgage company at risk of default.
Paying Cash and Surveys
What if you pay cash for the home – do you still need a survey? Technically, you don’t have to pay for a survey if you don’t want to because you don’t have a lender to answer to. But, you should consider it. If you take the property at face value, who’s to say that someone won’t argue that your property oversteps the boundaries in the future?
Just because a home has a nice patio, addition, or fence doesn’t mean it’s within the boundary lines. Wouldn’t you rather know before you put your hard earned money into a home whether it meets the boundary guidelines? Even though the legal description on the deed describes the property’s boundary, the survey acts as a ‘backup’ reassuring what it says in the property description. If the two don’t align, then it’s reason to worry.
Other Reasons to Pay for a Survey
If your lender requires a property survey, you have to pay for one if you want to buy the home. But what if it’s optional? What are the other reasons to pay for a survey?
- Know if a neighbor’s fence, patio, or other amenities sit on your property
- Know your property boundaries should you decide to add a fence or an addition to the home in the future
- Know what areas of the land you can separate if it’s a large piece of land
A land survey protects you and the lender. While it’s an added expense, it protects you in the future. It’s a lot cheaper to pay for a survey now rather than paying to take out a section of your fence and rebuild it because you find out after the fact that it sits on your neighbor’s property.
In most cases, you will be required to pay for a survey, but if you have the option, err on the side of caution. The survey can protect you in the future or even help you make a decision before you buy the home. If the home has encroachments on its property already, you may not want the headache of fighting the neighbors about the encroachment. Knowing before you close on the home can help you make the right decision.