I hope all of you are doing well and looking forward to the upcoming Holiday Season. Yes, hard to believe the Holidays are almost upon us, but it’s true. I’m sure some of you are already heavy into your holiday shopping so here’s a quick shopping joke. A man went to a toy store to do some early holiday shopping and asked the clerk, “Where are the Arnold Schwarzenegger dolls?” The clerk told him, “Aisle B, back.” Alright, alright, I promise never to do that again.
Moving on, I wanted to discuss an issue which I have talked about before but it’s worth mentioning again and that is the benefits of a buyer ordering a survey for their closing. Depending on which of our offices the closing takes place, as many as 40% of home buyers do not order a survey. I think 40% is a big number. I’ve been in the title business for a long time and I know that one of the most common, if not THE most common, title claims is a boundary dispute or encroachment matter. As a result, I am concerned that so many home buyers don’t have survey coverage on their title policies. A common scenario is that some type of encroachment (a driveway or fence usually) exists when a buyer closes but since they don’t have a survey, they are none the wiser. During their ownership these encroachment issues remain undiscovered until they sell the property, and the new buyer has a survey that uncovers the encroachments at which point the sellers exclaim “Why are we just finding out about this? Why didn’t this come up when we purchased?” Not a very comfortable situation to be in.
So, here’s what I think everyone needs to know about surveys. First, when a buyer does not get a survey, their title insurance policy gives them no coverage if the neighbor’s driveway or fence, for example, encroaches onto the buyer’s property. Any dispute over where the boundary line is located (which happens more often than you probably think) is likewise not covered without a survey. Without the insurance coverage the buyer then must deal with these issues on their own which can be time consuming, very expensive, and can delay a closing. Second, it is important to keep in mind that not all surveys are created equal. There are two types of surveys available to residential buyers: A Surveyors Real Property Report (SRPR) and a Boundary Survey. An SRPR is not a survey in the conventional sense and has limitations. An SRPR does show the house and driveway, but it doesn’t show fences, does not locate the property corners, and can’t be relied upon to erect improvements. In other words, an SRPR is not the type of property drawing that consumers envision when they think of getting a survey for their property. But the SRPR is of some benefit in that it shows the raised improvements that exist such as the house, garage, etc. A Boundary or Stake Survey, on the other hand, does locate the property corners on the ground with stakes and does show fences and can be relied upon to build a fence or other improvements. Obviously, the Boundary Survey is more expensive but is always what I recommend. (FYI the Title and Survey Work Order Form also has a very good and succinct explanation of the SRPR and Boundary Survey that a buyer can also, and should, review). By the way, the age of the house, in my opinion, should not influence a buyer’s decision on buying a survey. Whether it is new construction or 100 years old, encroachments can be lurking and waiting to cause havoc. Ok, that was a bit dramatic, but you get the idea.
As always, thanks for reading and most of all, thanks for supporting Investors Title Company. We are truly grateful. Have a great rest of the year.