Friday, October 5, 2012

Property Survey - Why do you need one?

Seems like any requirement that adds cost to a real estate purchase, is often met with reluctance. Survey costs generally fall into this category - but there importance on the Buy-Side should never be overlooked.  Outside of the actual deed, an ‘up-to-date’ survey is probably the 2nd most important document a Buyer needs when closing a deal.

Surveys are best described as ‘an overhead drawing of the subject lands' - in this case the property being purchased.  It should show not only the exact property boundaries, but any easements/encroachments/public right-of ways, which may affect the land. In addition, it identifies the exact location of all buildings/improvements on the property, revealing clearly the set-backs from the various lot lines. Other items which often appear include overhead lines, closed alleys, pools, fencing, porches and yard sheds.

Can we rely on an existing or original survey as provided by the Seller?  It all depends on how current the survey is today, and if no significant changes have occurred on the property. If an out-building has been built, fencing altered, building addition, etc, best practice is to order a new survey. Up to date surveys will and should reveal problem issues, which are always best rectified prior to closing any sale. 

Can we opt for Title Insurance vs. a Survey?  Best to ask your lawyer on this one – but in our view, better to have a current survey. Bear in mind that title insurance will be dealing with any problems ‘after the fact’, whereas a survey would have revealed any such problems prior to any sale.  This is only sound due diligence when buying a commercial property and should be viewed as such.

Again, seek out experienced commercial brokers commercial brokers within your market, to best represent your interests in acquiring any property.  To learn more about our experience and background, click here.

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