Purchasing a house is a process, and it doesn’t end as soon as the buyer finds that perfect house. There’s also the matter of signing a contract and preparing for closing. There are many different closing costs that come into play at that stage of the process, and buyers sometimes wonder if any of them can be avoided.
This past week, a question was posted on a local community blog site asking whether or not a survey was necessary for the closing or if it was just a rip-off being forced on buyers. I did not answer it at the time, because I felt it was important to address this issue beyond the frustration of one person who was trying to educate himself regarding the individual expenses encountered in closing costs. This person put into writing what many others ponder as they look at the different expenses that add up to a substantial dollar amount called “closing costs.” One of those items is a survey, which can cost about $1,000 if one is not already available.
What is the real purpose of a survey, and do you really need to get one? A survey is a diagram that is certified by a surveyor who comes to the property and intricately measures the property lines based on the legal description listed in the deed that will be transferred to you (also known as Schedule A). The surveyor measures and draws out the exact measurement and placement of the existing structures on the property so that there is no question where the property you are purchasing begins and ends.
If there are any easements or other items infringing improperly over those property lines — such as a neighbor’s fence or even electrical or telephone lines — the survey will show this as well. A survey is really the only visual source that can show you what you are buying and can document your rights based on certified measurements. This is a document you will need for the lifetime of ownership of said property.
Of course, if a survey is available through the seller, that is the easiest way to save money since it is free, if it is usable. “Usable” translates into: “How old is the existing survey that the seller has on file?” If a survey is 30 years old, typically a bank giving a mortgage and sometimes even the title company providing title insurance, will not accept it as usable. After so many years a lot may have changed on the property and in the surrounding area, causing the existing survey to be incorrect. If you have been offered an existing survey by the seller, the first step is to give it to your attorney who will then confer with the title company and bank to see if it is possible to use what exists and save you the money of having a new survey drawn up.
If utilizing the existing survey is not possible or if an existing survey is not available, then getting a new survey made is not only essential but nonnegotiable. Besides showing new buyers exactly what they are buying and where their property lines are, it is also the only way a title company can document specifically what they are providing title insurance for and ensure that no problems exist with that property. Similarly, in the case of the mortgage bank, they need to document specifically what property they are providing a mortgage for and ensure that no problems exist regarding the property that would harm the investment they have now elected to take on. When a bank decides to give a mortgage, they are investing money based on the fact that the property is free and clear of impediments, and the survey is part of the process of insuring the soundness of their investment.
Anessa Cohen lives in Cedarhurst and is a licensed real-estate broker (Anessa V Cohen Realty) and a licensed N.Y.S. loan officer (FM Home Loans) with over 20 years of experience offering full-service residential, commercial, and management real-estate services as well as mortgage services. She can be reached at 516-569-5007 or via her website, www.AVCrealty.com. Readers are encouraged to send questions or comments to anessa@AVCrealty.com.