Q: At our settlement recently, a lawyer charged us $100 for a survey. When we questioned this charge, we were told it was a lender's requirement and we could do nothing about it. Just what is a survey? And is it really needed when you buy a house?
A: I hope the lawyer at least gave you a copy of the survey.
It is important to distinguish between a survey and an appraisal -- both of which are usually charged to the buyer. An appraisal assists the mortgage lender in assessing the value of the house so as to determine whether a mortgage should be made and in what amount. Generally, the appraisal will analyze the condition of the house, its location, structural soundness and comparable sales in the area.
A survey, on the other hand, goes to the question of a house's marketability. The surveyor determines whether the house is within the property borders, whether there are any encroachments on the property by neighbors and the extent to which any easements on the property may affect legal title.
Lenders in the Washington area always insist on obtaining a clear "lender's" title insurance policy covering the face value of the mortgage. Title companies will issue an exception to title unless a survey has been ordered, and thus in Maryland and Virginia surveys are usually required.
Up until recently, most mortgage lenders in the District did not require a survey, being content with their general knowledge of District property law and conditions. However, in recent years more lenders on District properties have begun requiring a survey as a condition for obtaining a mortgage loan.
My own belief is that everyone buying a house should obtain a survey. It's a good idea to learn, for example, where your property lines are, and whether there are any building restrictions affecting your right to add a porch or a fence.
But, here are some suggestions involving the survey process.
First, survey prices vary considerably. I've seen them as low as $70 and as high as $150, for the same single-family house's lot. Ask your settlement attorney for an estimate. If it seems too high, arrange for your own survey and make sure a copy of the survey gets to your lender well in advance of settlement.
Next, ask your sellers who did their survey. Unfortunately, most lenders will not honor a survey if it is more than six months old. But inquire from the prior surveyor whether the old survey can be up-dated and whether this will save you some money. Some of the more reputable surveyors are happy to get your business and will give you a break in the price.
You should also go to the surveyors in the land records office where your property is located. They are quite helpful and may be able to assist you with boundary questions, easement issues and such.
If you are buying a condominium unit, you will not have to obtain -- or pay for -- a separate survey of your unit. That survey has already been done as part of the plans which were recorded with the condominium documents.
Finally, keep in mind that most surveys will not include staking your property corners. If you want stakes posted, it will cost you a few additional dollars. You should make the necessary arrangements for stakes at the time you order the survey.
And don't forget to get a copy of the survey from your settlement attorney.