A survey shows a purchaser exactly where property lines are located on the land they are purchasing; it also sets out and shows any recorded easements, existing fences, walls or structures, as well as, any other potential encroachments on the property. Additionally, a survey will show if any of the property improvements encroach upon an easement, building line or neighboring property.
It is common for a lender to not require a survey as a part of the loan approval process. The Lender’s Title Insurance Policy insures the lender for any survey issues. Therefore, lenders bear little risk in not requiring a survey. However, purchasers have more practical issues to consider: where the actual property lines are located, whether there is an encroachment on the property or whether they are acquiring property that contains an encroaching structure. While the Enhance Owner’s Title Insurance Policy offers some protection to purchasers, the coverage is subject to a deductible (generally $5,000.00), with a maximum coverage of $25,000.00 for claims. If a survey is purchased at the time the Enhanced Owner’s Title Insurance Policy is issued, a purchaser will have full coverage, without a deductible, for any undisclosed survey matters.
Some purchasers believe a title exam will reveal all matters concerning the property; this is not the case. For example, a title exam may show the existence of a utility easement, but it will not show where the easement is located on the property. Also, title examinations do not reveal fences, walls, and improvements that might sit on or over such easements or property lines.