What should a Buyer expect if the existing survey is not approved by the lender?

What should a Buyer expect if the existing survey is not approved by the lender?

• A. The Seller must provide a new survey at their expense
• B. The Buyer must pay for the new survey
• C. The title company will cover the costs
• D. The contract will allow for dispute resolution

Answer: (A)

When a Buyer encounters a situation where the existing survey is not approved by the lender, it typically means that the lender requires a clear and updated representation of the property boundaries and any potential encroachments or discrepancies. In such cases, it is standard practice that the Seller is responsible for providing a new survey at their own expense. This responsibility arises because the survey is essential for the lender to assess the property adequately and determine the risks associated with lending on that property. Since the Seller is conveying the property and must ensure that all conditions for the sale are met, including lender requirements, they need to resolve any issues related to the existing survey. Therefore, rather than placing the financial burden on the Buyer, the contract generally stipulates that the Seller must cover the cost of obtaining a new, lender-approved survey. The other choices offer alternatives that do not align with typical real estate practices. For instance, having the Buyer pay for a new survey would contradict the Seller's obligation to provide all necessary documentation for the property sale. The title company covering the costs is also unlikely, as their role focuses on ensuring that the title is clear rather than assuming costs related to surveys. Lastly, while the contract may include provisions for dispute resolution, this scenario typically does not invoke such

When a Buyer encounters a situation where the existing survey is not approved by the lender, it typically means that the lender requires a clear and updated representation of the property boundaries and any potential encroachments or discrepancies. In such cases, it is standard practice that the Seller is responsible for providing a new survey at their own expense.

This responsibility arises because the survey is essential for the lender to assess the property adequately and determine the risks associated with lending on that property. Since the Seller is conveying the property and must ensure that all conditions for the sale are met, including lender requirements, they need to resolve any issues related to the existing survey. Therefore, rather than placing the financial burden on the Buyer, the contract generally stipulates that the Seller must cover the cost of obtaining a new, lender-approved survey.

The other choices offer alternatives that do not align with typical real estate practices. For instance, having the Buyer pay for a new survey would contradict the Seller's obligation to provide all necessary documentation for the property sale. The title company covering the costs is also unlikely, as their role focuses on ensuring that the title is clear rather than assuming costs related to surveys. Lastly, while the contract may include provisions for dispute resolution, this scenario typically does not invoke such