When Selling Farm Land, Do You Need a Survey?

Surveyors use the legal description of the property to create a visual outline of your property boundaries, and they also measure the size, or acreage. Many times with rural land, tradition and history trump truth and fact: Boundaries become historical rather than legal. For example, your great-great-grandfather may have erected a fence close to the property line but not exactly on it -- and succeeding generations just forgot about that. Over time, the fence represents the property boundary for both you and your neighbors. A survey will either debunk or confirm those longstanding beliefs. Even if you’ve coexisted peacefully with neighboring landowners for years and had no property line issues, your potential buyers may one day find themselves with different neighbors who may not be as easygoing. A survey will avoid future conflicts and legal entanglements.

If you don’t have a current survey, in theory you don’t need one to sell your property. In practice, unless your buyer has cash in hand for the full purchase price and doesn’t need financing to complete the purchase, the odds are high his bank or lender will require a survey. The bank will want to know that your representations to its customer, the buyer, are 100-percent accurate and legal. Also, a bank will typically require an appraisal to assure the land’s value before loaning money to purchase it, so the appraiser will need exact acreage and land details to determine market value. According to Justine Smith with Moxie Realty Group in Austin, Texas, if there is an existing survey, the lender and title company need to agree that it’s sufficient and a new one isn’t necessary. “Also, the seller typically bears the cost of the new survey, although that’s negotiable,” said Smith. She also noted that even with cash transactions, an agent representing a buyer will likely request a survey for the buyer.

A title company protects the buyer’s ownership in the land. Title representatives research past records, such as deeds, to see if anyone else has any claim against the land, such as a financial lien. According to Smith, the title company that the buyer selects to insure clean title needs to approve the survey before insuring it. “If there is no survey or the survey isn’t approved by them, you have no recourse in the future if there are issues such as someone encroaching on your property.”

If you don’t know any surveyors or surveying companies close to you, ask your real estate agent, a mortgage lender that specializes in rural land loans, or your local chamber of commerce. You want one with rural experience in your area. If you have several to choose from, call a few and get cost estimates and availability. Each state has its own licensing regulations or requirements for surveyors, but all surveyors operate under certain professional and ethical standards and practices. Give your prospective surveyors as much information as possible to get a reliable quote, including estimated acreage, how hilly or overgrown the property is, and as much of the deed description as you have available. As he performs the survey, the surveyor leaves stakes around the corners and boundaries for you and subsequent owners to rely on so you now where your property boundaries are.