Does The Buyer or Seller Pay For a Land Survey? | askBAMLand

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Does the buyer or seller pay for a land survey? Unlike other fees, it is actually negotiable. Whoever wants the land survey performed normally pays for it.

A home inspection is a key part of the home buying process. A land survey is like an inspection, but for the land that the home sits on. A land survey can detect potential costly problems, influence the price of the property, and prepare the homebuyer.

Unlike other fees associated with buying or selling a home, either the buyer or the seller can pay for the land survey. It is more common for the buyer to pay for it because buyers usually benefit more from it. The seller may pay for the survey as a condition for the buyer to purchase the property.

The buyer and seller can also co-sponsor a land survey if it would benefit both of them. Land surveys are even more important if the property includes a large parcel of land. It may also be required by the mortgage lender in order to establish the boundaries of the property and any potential risks. However, buyers purchasing a property with cash often skip the survey in order to lower the overall price tag of the home.

Source include The Motley Fool, Zillow, Mortgage Reports, and Nolo.

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What is a Land Survey?

A land survey is the equivalent of a home inspection but for the parcel of land that is attached to the home. During a land survey, the boundaries of the property are determined. This is important for insuring the property and preventing disputes with neighbors. A surveyor will also make note of any additional structures on the property and formulate a legal description of the land.

Why is a Land Survey Important?

A land survey can be very beneficial to the buyer. In addition to noting any potential problems with the property, it can also be helpful for settling any existing boundary disputes.

If the buyer is interested in developing the land, a survey is vital to the long term success of the project. This is because the surveyor can note the locations of utility lines, which can determine where it is possible to build additional structures.

In some states, a land survey is required by the mortgage company, title company, or insurance company. This is because it is important to pre-determine how much land the insurance policy must cover. It may also effect a lender’s ability to pre-approve potential buyers and lock in their interest rate. Title companies often require a land survey for large properties in order to prevent disputes over ownership of the land. In many cases, paying for a land survey upfront can save buyers from costly legal troubles down the line in the event of a boundary dispute with a neighbor.

Who Pays For the Land Survey?

Most fees associated with buying or selling a property are paid strictly by the buyer or seller. For example, the seller normally pays the real estate agent for their services. The buyer normally pays for the appraisal and inspection as part of their closing costs.

When it comes to a land survey, either the buyer or the seller can pay for it. It is more common for the buyer to order and pay for the land survey because it is highly beneficial for them to know what they are buying. However, the seller may pay for the survey if it is part of a condition of sale to make the property more appealing to the buyer, or if the seller will uniquely benefit from having the land surveyed.

When Would the Seller Pay for a Land Survey?

It is relatively rare for the seller to pay for a land survey; however, there are certain situations when the seller would be motivated to order a land survey.

Seller Consessions

Seller concessions are when the seller agrees to help the buyer with closing costs. There are 2 ways to do this. One way is for the buyer to roll their closing costs back into the overall cost of their home loan. Instead of having to come up with an extra $5,000 at the time of closing, the buyer is able to gradually pay off closing costs on top of their mortgage and interest. This would need to be agreed upon by both the buyer and seller, as well as added to the home’s contract and approved by the lender.

Another way to do seller concessions is for an extra $5,000 to $10,000 to be added to the overall cost of the home and property. The seller would use this amount to pay for the buyer’s closing costs and the buyer would pay for the additional cost through their mortgage.

Seller concessions most commonly involve the seller paying for part or all of the buyer’s closing costs. However, seller concessions may also involve the seller paying for the land survey. In this case, it would make the property more attractive to the buyer and allow the seller to sell quickly. If a property is particularly unique and the seller is not getting offers, this may be beneficial for everyone involved.

Boundary Disputes

Generally, a land survey is supposed to protect the buyer from existing land disputes by establishing where the boundary line is between properties. For sellers, a land survey can also be beneficial to resolve boundary disputes before the property is sold.

If the seller has a large property that is not fenced off from their neighbor’s land, it is possible for the seller and the neighbor to disagree about the location of the boundary. This can become a problem if the neighbor, the buyer, or the seller wants to build a structure near the boundary line or if they want to put up a fence. The seller can resolve existing disputes with a land survey by legally establishing whose land is whose, and the amount of land that they have the legal right to sell.

Easements or Encroachments

An easement is an arrangement where one landowner grants permission for a neighbor to utilize a portion of their property. This usually looks like the landowner allowing the neighbor to cut through their land as a shortcut or to utilize some of their land for grazing animals. Easements can be tricky for everyone involved when the landowner goes to sell their property.

An encroachment is when a structure or improvement belonging to a neighbor extends partially onto the seller’s property. Encroachments are not normally formalized agreements, so a land surveyor will need to examine the property to determine if there are any encroachments.

Because easements or encroachments may effect the overall value of the land and how likely a buy is to put in an offer, it can be beneficial for the seller to order a land survey. This allows the seller to have legal recognition of how their land is being used, which may allow them to increase the overall price of their property.

10 Reasons Why a Buyer Should Order a Land Survey

It is far more common for the buyer to order and pay for a land survey. There are 10 reasons why a land survey would be beneficial to the buyer:

  1. A land survey is required by the lender, title company, or insurance provider.
  2. Locating utility lines is vital for building additional structures on the land.
  3. A topographical survey can locate areas of potential erosion.
  4. A survey can inform the buyer about potential costs and problems associated with the land.
  5. A new land survey can update information from an outdated land survey.
  6. Information from the land survey may impact the buyer’s tax rate.
  7. The land may have certain restrictions if it boarders on a protected reserve or national park.
  8. Easements may impact if the buyer is interested in purchasing the land.
  9. It is important for the buyer to know what, exactly, they are buying.
  10. A location survey may be necessary for the buyer to get the right zoning permits.

What Are the Different Types of Land Surveys?

There are 7 different types of land survey that a buyer or seller may order for their property. Depending on the size of the property, the existence of any easements or encroachments, the type of property, and the buyer’s intentions for the property, a certain type of land survey may be necessary.

Topographic Survey

As the name sounds, this type of land survey lays out the location of both natural and man-made features. If the buyer plans to make any site improvements, a topographic survey will be necessary for establishing a location for the improvements. When a surveyor performs this type of survey, they will make note of any existing buildings or fences, rivers or streams, ponds, utility lines, trees, and elevation changes.

Construction Survey

A construction survey is only relevant if the buyer plans to build on the land. It is most commonly performed when the buyer is purchasing an emptylot. The findings from a construction survey will be important to the builders to help them determine the placement of improvements,

Site-Planning Survey

This type of survey is very similar to a construction survey. It is also used to plan the location of additional improvements, but it is relevant primarily for obtaining permits.

Subdivision Survey

A subdivision survey is necessary when the buyer or seller intends on dividing up the land into multiple lots. The survey is necessary for developing plans regarding how to divide up the land. This information must also be filed with the recorder’s office.

Location Survey

A location survey looks at both the boundary lines of the property, as well as anything on the property. The surveyor will take note of the size of the property, the location of the boundary lines, the location of improvements, the size of the improvements, and the distance between the improvements and the property line.

Boundary Survey

A boundary survey is the most common type of survey that both buyers or sellers may order and pay for. It is used to determine where the boundaries of the land are located. This is important for settling boundary disputes and establishing the exact size of the land that is being purchased.

In most cases, the buyer will only pay for a certain type of survey that is relevant to their interests and needs. However, there are cases where both the buyer and seller may pay for specific types of surveys. This situation is more common when the land is being subdivided or developed and there is an existing boundary dispute that must be resolved before closing.

About THE AUTHOR

Brittany Melling

Brittany Melling

Brittany has been in the land business since 2020 when the world was starting to shut down. Since then, we’ve sold to dozens of people from ATV weekend warriors to camping enthusiasts to retired truck drivers. Our inventory spans mostly in the western United States. We’ve been trained by experience, land acquisition courses, and hundreds of hours meeting with county assessors and clerks, zoning officials, realtors, and land investors. We’ve answered hundreds of questions from people regarding the buying and use of land.

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