With both first and second mortgages, the lenders will inquire carefully into the financial responsibility of the would-be borrower. They will want to know exactly how much of his own ready money he plans to use in the transaction. This is to be sure that he has a substantial equity in the property and will not be struggling under too great a financial burden.
Having perfected the method for financing your purchase, now comes the formal contract to buy. This is an agreement whereby you undertake to consummate the purchase at a future date, generally thirty to sixty days, at the agreed price. On executing such a contract, which should be reviewed by your lawyer before you, as buyer, sign it, expect to pay the seller through the broker ten per cent of the total purchase price. This is done on signing the contract. The time between signing this contract and the date set for the title closing is employed for title search and insurance, land survey and similar details. If the title proves imperfect so that you cannot complete the purchase, your check is returned to you. As for the cost of title insurance, the corporations issuing such policies have an established scale of prices. These vary slightly in different parts of the country. Title policies have generally replaced the old independent title search by lawyers that had no elements of insurance. Where a company has already searched and insured the title, reissue of the policy is made to you at about half the original fee.
The cost of surveying property is based on the amount of work involved. For surveying five acres of what was formerly farm land and that has never had its borders so measured and defined, the average charge today is from one hundred to one hundred and twenty-five dollars. Special conditions may raise or lower this. An established surveyor who knows the locality is, of course, the best person to undertake such work. His previous surveys of other adjacent properties can often enable him to locate and identify old boundary marks that some one not conversant with the locality might find baffling. Much country property is very vaguely described by old deeds. “Fifty acres more or less bounded on the east by the highway, northerly by land owned by Jones, westerly to that of or recently owned by Smith, and southerly by that of Brown,” illustrates roughly an old title description. You may get forty-five or fifty-five acres, and it is up to you to establish just what fences and so forth are your actual boundaries.
A surveyor reduces all this to exact measurements and puts definite markers at the corners and wherever else the party lines change direction. When finished, he provides you with a certified copy of his survey in map form, giving distances and indicating location of his monuments. These are usually either iron stakes driven two or three feet into the ground or concrete posts about two inches square set in the ground and plainly visible. It is illegal to move such marks.