Do you need to get a land survey of your lot when you buy a home?
Do mortgage lenders care?
Mortgage lenders do not require a survey anymore. That practice ended around 2005. This is when the mortgage industry negotiated with the title industry to provide title insurance coverage without exception for matters related to a survey in the Lender’s Title Insurance Policy. The result is that lenders have automatic coverage for matters of survey even if no survey is done.
Prior to that, title companies typically ordered surveys on all purchase transactions with mortgage loans. Mortgage lenders required that they receive a title insurance policy without exception for matters of survey. So a survey was done. Again, that is no longer the case as mortgage lenders are given title coverage automatically in the lenders title insurance policy. And a lenders title insurance policy is mandatory, whereas an owner’s title policy is optional.
Owners vs. Lender’s Title Insurance: What You Need To Know
Should homeowners care?
However, this change which added automatic coverage to the lenders title policy did not apply to Owner’s Title Insurance Coverage. The Owner’s title policy will contain an exception for matters that would appear on an accurate survey of the Property. Home buyers are not required to obtain a survey. It is their choice to do so, or not do so.
Now you know mortgage lenders do not require a new survey be done. Most mortgage lenders will accept a recertification of whatever is currently on file for a land survey, with the county.
Should you have one done? Maybe, if you see a potential conflict with a neighbor on a driveway or fence line. And maybe if you are buying a home on a larger plot of land.
Why Buy Owner’s Title Insurance?
What do title companies think?
Some title companies continue to order surveys on behalf of the buyer as a matter of course. I spoke to a local title attorney in Virginia who said:
“I stopped that practice a long time ago for several reasons.
First, since surveys are not routinely being ordered, the fees charged by various companies to conduct surveys are all over the board and it is difficult to shop for the best price.
Second, depending upon where the property is located and the type of property survey, prices can vary widely.
A townhouse in Ashburn VA may be $350. But acreage in Purcellville VA may be between $2,500 and $10,000. It makes a huge difference if someone wants a boundary survey versus a house location, or wants the property staked vs. not staked.
I have just found that, unlike termite inspections which are uniform in price and scope, surveys can be very particular. Therefore, I believe it is in the best interest of the buyers to have a direct relationship with their surveyor. If they want a survey, they should order it on their own. At least in my opinion.“
Conclusion
Now you know more details on surveys. Still have questions? Please schedule a call or email me with questions on surveys, title questions, or any mortgage questions.
Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.
