Lenders seldom explain the difference between title insurance and a boundary survey.  In hopes that someone will benefit, I am going to attempt it.

Title Insurance

In simple terms, title insurance protects the insured party from loss due to defects in title.  Title is the many rights that the owner has in a particular piece of land.  Your deed is only evidence of title. It is not conclusive proof that you actually own the parcel.  Title insurance helps in cases where there might be some claim by another to rights in what you think is your land.  Again, I am not an attorney, I am explaining things in simple terms so the reader can realize that there are differences in title insurance and boundary surveys.

When you finance a parcel of land, you purchase title insurance to cover the banks losses, just in case.  You are not required to purchase title insurance to cover your losses.  Be sure you talk to your attorney about this. Do not rely on the lender to guide you.  The title insurance policy covers many things, but there is usually a long list of exceptions.  Be sure that you understand these exceptions, and how they can affect you.

The Boundary Survey

Title insurance is just that. It covers the title. It does not cover boundaries.  That is where the survey is important.  Just as the title search might find a defect in title, a survey will find problems in boundaries.  There might be evidence of an easement on your land that the title search missed. There could be land that you are purchasing that is being occupied by a neighbor.  The title search will not find anything like this. Only a survey will discover these things.  There are numerous problems that might be discovered.

I suggest to always contract with the surveyor before you purchase the property.  If there are boundary problems, you’ll know about them before the transaction. The present owner can address them before you purchase the property.  It might delay a closing, but a delay before the purchase can save headache, heartache, and monetary loss later.

A boundary survey AND Title insurance are two necessary components of any real estate transaction.  Do not let anyone talk you out of either.  Realtors and lenders are afraid that you’ll back out of the deal if you incur another cost.  That cost could multiply if you have problems after your purchase. Your dream home could become a nightmare.  A boundary survey might alleviate some of that risk.

Spring is almost here. To begin the project that you’ve been planning, get to your local building department to check the requirements.

Subdivision

If you are thinking of dividing your property or moving a boundary, you will have to appear before the planning board. Let your surveyor handle this for you. A surveyor can answer the questions that they might ask.  It also takes time– sometimes two or three months for a simple request.

Building

Whether it is a deck or a house, the building department might need verification that the setback requirements are met. The only professional that is allowed to do this is a surveyor (at least it is so in New York).  If anyone else proclaims that they can do it, remind them that your surveyor has that covered.

Timing

Since it takes time to do the survey, present it to the municipality, and get approval, contact your surveyor today.  The sooner things get moving in the approval process, the sooner your project can get moving, completed, and enjoyed.

I wish the best for everyone in the New Year.  This will be the 10th anniversary for Surveysmith. My first year was in Colorado.  My last nine years were here in NY.  The economy has affected all businesses, so I have had some time to review the way Surveysmith operates.

This year begins a new era in customer service. I will improve communication with my clients.  I will improve my efficiency and completion times.  I will be more organized.  I will simply try harder.  Thank you to all my past clients.  Without you, Surveysmith would have failed long ago.  To my future clients, I will strive to meet your needs as quickly as the process allows and communicate with you through the entire survey.

I look forward to a great year.

A client called today explaining that the lender had told her that their estimate (and allowance) for a boundary survey, foundation location, and final survey should be $xxx. (The amount is not disclosed because of anti-trust laws.)  I had to educate her in the survey process and explain that the price would actually be about six times their estimate. Their estimate was less than the average cost of a lot survey in a subdivision made by the original surveyor — twenty-five years ago!

Here is my advice to the banks and closing coordinators. Stop estimating the price of a survey.  There is no “usual” price. There might be complications that are discovered when doing the research or field work that make the survey more expensive. The days of a$500.00 survey are long past.

When you contract with a surveyor, you are paying for the expertise of a licensed professional– just like a doctor. If you paid your doctor by the hour like a laborer, her rate would be about $1000.00 per hour. Instead, you are paying for the expertise and knowledge of years of expensive training, practice, and the extended liability of that professional.

I say to the banks: I do not tell your potential borrowers that your rate should be 1% and that the bank attorney should only charge $100 for their services. Do not tell your customer that the survey should only cost $500.00. At the very least, your estimate should be three times that amount. Even then, it might vary regionally.

To the potential client when presented with estimate for $500.00: As in all things, “you get what you pay for.”

I recently attempted to file a subdivision plat for a client. The county would not file the plat because the land taxes had not been paid.

After a subdivision plat is approved by the municipality, the plat must be filed within sixty-two days after the date of that approval (in New York State). In this case, the taxes had not been paid. The county notified the owner, but they chose to wait to pay them. Now the sixty-two days have passed.

At this point, we must resubmit the plat to the local municipality to be reconsidered and signed again. The locality can choose to hold another public hearing, or opt to sign it because of the circumstances.

Do not risk losing the sale, delaying a closing, or opening another public hearing on your project. Be sure the taxes are paid for the current year before attempting to file the plat.

A Land Survey is an important part of your home purchase. Just as you should have a well test, engineering inspection, and title insurance, a land survey can show problems before you purchase the home.

Title insurance alone does not “insure” the boundaries of your parcel. A land survey should reveal potential or existing problems, or let you know that everything is in order.  It is good to know where your boundaries are.  The realtor or prior owner might think they know, but only a surveyor can confirm the location of your boundaries.

For your own peace of mind (especially in this age of foreclosures, tax sales, and low home prices), contract with a surveyor.

The joyful noise of the phone surprised me, but it was not the magnitude of surprise that my client experienced at her closing today.

It seemed like an ordinary real estate closing.  She was signing so many papers that her hand went numb.  Suddenly, the title company representative announced: “by the way, we can’t close until we receive a boundary survey certified to us and the lender.”  I sure am glad that there was a table between them.  My client was stunned.  After a brief mental image of the title company representative’s mouth full of the previously signed paper material, she jumped to action – calling me to get a certified survey.

I was in the field at the time.  Fortunately, there was cell coverage for my Sprint/Nextel wireless communication device.  I told the paralegal to email a copy of the title report to me.  I packed the equipment, walked to the truck, and drove back to the office.  I reviewed the title report, revised the previous survey as needed, placed the proper certifications on the plat, plotted it, and called the lender’s representative to announce my impending arrival.  The certified plat was delivered in less than five hours.

I was glad to be in a position that allowed me to meet my client’s need.  Had I been out of town, or in a spot with no cell service, their final disbursement would have been delayed another day or two.  Resolution came quickly, this time.

My advice to borrowers is this: Ask the lender and title company if they will require a certified survey.  They should know the answer well before the closing.  If they don’t know, keep asking so your closing is not delayed.  In good economic times, your surveyor might not be able to respond the same day as your request.

My advice to lenders and title companies is this: Always require a certified survey.  Why lend money using a property that might have a boundary problem as collateral?  It is in your and your client’s best interest.

I am officially a Certified Trainer for Microsurvey Software. MSCad is the solution for the land surveyor who wants surveying software and data collection software that is designed for surveyors. This software is the best. No-code linework is a time saver in FieldGenius data collection software. MSCad is calculating and drafting software that is second to none. Go to http://www.microsurvey.com and get a working demo. Once you try it, you’ll want it.

Site Under Construction.  I am truly sorry that you had to read that.  I am updating the site to allow easier posting of news and information about Surveysmith and general surveying information like items that are listed below:

• Surveying
• Why would I subdivide my land?
• Why a surveyor cannot tell you what you own.
• The things you need to know about buying land at tax auctions.
• Why you need both a survey AND title insurance.
• Email with your suggested topics.

Check back soon to read some exciting information that you might find useful.

Please call (518) 701 8059 or email ray (at) surveysmith dot com to contact Surveysmith.