House to House: Surveys Strongly Recommended when Purchasing Real Estate
By Gary Isom, Executive Director of the Arkansas Real Estate Commission
By far one of the biggest mistakes buyers make when purchasing real estate is choosing not to have a new survey completed.
Several complaints have been filed through the years with the Real Estate Commission about property lines, driveways, access to property and other issues of confusion as to whether a certain strip of property was or wasn’t included in their purchase of land. Of course, for the Real Estate Commission to have jurisdiction over the issue, the complaint has to be filed against a person licensed by this agency, usually a Realtor®.
All too often in these situations, a buyer will decide that he doesn’t need to obtain a survey of the property. Sometimes the buyer will ask for a copy of the latest survey done on the property, usually done for a current or previous owner when that individual purchased the property. This is not advisable, however, as the property may have been affected by various events since the latest survey. Other times, a buyer may see no reason to assume the property lines are anywhere other than where they appear to be and choose to save money by not ordering a survey. It’s understandable why a buyer may decide this. After all, if the property is in a subdivision, shouldn’t property lines have been clearly sorted during the development phase? And what of fences? It’s perfectly logical to assume that a fence at the edge of a property was positioned on the property line, or that a driveway that is shared with the next door neighbor has a property line running down the middle. Another presumably safe assumption would be that a fairly new storage building was built within the property lines. When purchasing real estate, however, assumptions, logical or otherwise, are never safe. The only way to determine for sure what you are buying is to have a survey completed.
In any of the situations listed above, the buyer will almost always be left holding the bag. Simply put, it’s difficult to hold anyone else at fault when the buyer learns after closing that there’s a problem with some element of the physical location of the property, rights of access to the property or usage of the property. The real estate licensee cannot vouch for all the geographical aspects of the property. Sometimes, even the seller may be confused.
The Real Estate Commission once had a complaint where the seller actually believed a portion of property nonadjacent to her property belonged to her. She had tended the area as though it was hers. Unfortunately, the person who bought the property from that seller would later learn that the seller was wrong and did not own the additional strip. Another buyer who filed a complaint against their real estate agent was satisfied at the time of purchase to have the seller just “mark the corners”. That didn’t work out well either.
Even though there are a myriad of professionals working to bring a real estate transaction to pass, the only professional truly capable of establishing property lines, rights and access is a surveyor. A title insurance company will prepare a title insurance policy to cover the property described in the legal description; however, while that policy may include recorded disputes over property boundaries, the title insurance company doesn’t define where the property lines run. An appraisal report may include some information taken from the legal description about property boundaries but will not likely include information about access to the property or rights of usage. Neither can a home inspection be counted on to address the layout of the land. The property insurer is focused on the improvements to the property, not where the lines run. And unless the lender requires the buyer to obtain a survey, they do not establish where the property lines run.
So what exactly is a survey? Surveys show property lines, right-of-way easements, utility easements and they detect encroachments upon adjacent properties. These are all issues that often become central to a property owner’s dissatisfaction and discontent with their new purchase. Surveys may also help a buyer determine before closing the transaction whether the property can be used for what they intend. For example, if the buyer plans to put a double wide mobile home on the property, a survey will reveal setbacks and utility easements that could prohibit placement of the mobile home on the lot.
The bottom line is that buyers of real estate should consider two facts when deciding whether to obtain a survey. First, only a survey will determine with any degree of certainty what is being purchased. Second, if the buyer decides not to obtain a survey, they need to be prepared to “own” that decision and its consequences because no other party other than a surveyor will likely be held responsible for those things that only a survey will reveal.
House to House is distributed weekly by the Arkansas REALTORS® Association. For more information on homeownership in Arkansas, readers may visit www.ArkansasRealtors.com.