One question that occasionally comes up in a real estate transaction is whether a buyer should obtain a survey or an Improvement Location Certificate (ILC).
The problem is that most buyers have never ordered either one. Many people are not entirely sure what the difference is, how they relate to title insurance, or why someone would choose one over the other.
Like many real estate decisions, this is not a question with a universally correct answer. Instead, it’s a question of risk, reward, cost, timing, and how much certainty you want before closing.
My goal is not to tell you what to do. My goal is to help you understand the tradeoffs so you can make an informed decision.
First, What Is a Survey?
A survey is prepared by a licensed surveyor and is intended to determine the location of a property’s boundaries and show those boundaries in relation to the improvements on the property.
An “improvement” is simply something added to the land. Examples include a house, garage, shed, barn, fence, patio, driveway, retaining wall, sidewalk, or similar structure.
When people think about a survey, they often picture the surveyor locating the property corners and marking the boundaries. While the process is more involved than that, the basic idea is correct: the surveyor researches records, evaluates field evidence, and determines the location of the property boundaries.
The end result is a document intended to provide a high level of confidence regarding those boundaries.
What Is an ILC?
An Improvement Location Certificate, usually called an ILC, is also prepared by a licensed surveyor.
Like a survey, it shows the property and the improvements located on it. However, an ILC serves a different purpose.
In Colorado, ILCs are commonly used in residential real estate transactions. They can provide useful information regarding the property and its improvements, but Colorado law specifically states that an ILC is not a Land Survey Plat or an Improvement Survey Plat and should not be relied upon to establish fence lines, building lines, or future improvement lines.
Why have both documents? Because they are often used to solve different problems.
A survey is generally used when someone wants a high degree of confidence in the location of the property boundaries. For example, if you are planning to build a fence, construct an outbuilding, resolve a boundary dispute, or simply want as much certainty as possible about where the property lines are located, a survey may be worth the additional cost.
An ILC is commonly used in residential real estate transactions because the question is often less about establishing the exact location of the property boundaries and more about understanding how the existing improvements relate to the property. Is the house generally where it is supposed to be? Are there any obvious concerns involving the garage, fence, shed, or other improvements? In many transactions, that level of information is sufficient for the buyer, lender, title company, and seller.
That’s why an ILC often costs less than a survey. The surveyor is not being asked to provide the same level of boundary determination that would be required for a survey intended to establish property lines. The trade-off is that the buyer has less certainty about the exact location of those boundaries.
Neither document is automatically better. The question is whether the additional certainty provided by a survey is worth the additional cost, time, and effort in a particular situation.
Sometimes the Decision Isn’t Entirely Yours
Up to this point, I’ve been discussing surveys and ILCs as though the decision were entirely the buyer’s. Often that is true, but not always.
In some transactions, a lender, title company, or other party may require a survey or an ILC. In those situations, the discussion may shift from whether you want one to who will order it, who will pay for it, and how it affects the transaction timeline.
I’ll discuss that in more detail in a companion article on title insurance, Owner’s Extended Coverage, and survey matters because those topics are closely connected to this conversation.
Why Would Someone Care About the Difference?
Because certainty costs money. Imagine two buyers purchasing similar homes.
The first buyer wants as much information as possible before closing. They are concerned about property boundaries, future improvements, and eliminating uncertainty wherever possible. That buyer may decide a survey is worth the additional cost.
The second buyer is purchasing a typical residential property in a subdivision. They see no obvious boundary concerns and are comfortable accepting a little more uncertainty in exchange for spending less money. That buyer may decide an ILC is sufficient, or may decide not to obtain either an ILC or a survey. Neither buyer is necessarily right or wrong. They’re simply making different decisions about risk and cost.
Situations Where a Survey May Make More Sense
A buyer might lean toward obtaining a survey if:
* The property consists of acreage.
* The boundaries appear unusual or irregular.
* There are visible encroachments or boundary concerns.
* The buyer plans to build a fence, addition, garage, barn, or other structure.
* There is a disagreement about a property line.
* The buyer simply wants greater certainty before closing.
In these situations, the additional information provided by a survey may justify the additional cost.
Choosing Between an ILC, a Survey, or Neither
Many residential transactions involve relatively standard lots in established neighborhoods.
In those situations, some buyers decide that an ILC provides enough information for their needs. Others decide not to obtain either an ILC or a survey. They may conclude that the additional information provided by an ILC or survey is unnecessary, given the property’s characteristics and their comfort level with the associated risks.
Again, this is not about right versus wrong. It is about understanding the available options, the information each provides, and the risks of proceeding without them, then making an intentional decision.
Cost, Timing, and Negotiations
A survey generally costs more than an ILC. Depending on the property and the type of survey being performed, the difference can be significant.
Surveys also take time.
If a buyer wants a survey completed during the contract period, it generally needs to be ordered early in the transaction. Once the surveyor begins work, the buyer will typically be responsible for that cost regardless of whether the transaction ultimately closes.
There can also be negotiation considerations.
In a highly competitive market, buyers sometimes avoid requests that could increase costs, delay the process, or complicate negotiations with the seller.
That does not mean a buyer should avoid requesting a survey if they believe one is important. It simply means they should understand that every request has consequences, both positive and negative.
Understanding the Risk
Every effort to reduce risk comes with a cost. The question is not whether risk exists. Risk always exists. The question is how much risk a particular buyer is willing to accept.
Some buyers are willing to spend additional money to reduce uncertainty. Others are comfortable accepting a little more uncertainty if it helps them preserve cash, simplify negotiations, or increase their chances of getting the home they want. Those are personal decisions.
My role is not to make those decisions for you. My role is to help you understand the risks, costs, potential benefits, and available options so you can decide what makes the most sense for your situation.
One thing I should note is that I’m explaining these topics based on my experience helping buyers and sellers navigate real estate transactions. I can help explain how surveys, ILCs, title insurance, and contract provisions typically work in practice, the role each plays in managing risk, and how they relate to your particular transaction. What I cannot do is provide legal advice or tell you how an attorney might advise you or how a court would interpret a particular situation.
One Final Thought
Many buyers approach this conversation assuming there must be a single correct answer. In my experience, there usually isn’t.
A survey provides greater certainty, but it costs more and takes longer. An ILC is generally less expensive and is commonly used in residential transactions, but it may not provide the same level of certainty regarding property boundaries.
The important thing is not that every buyer makes the same choice. The important thing is that every buyer understands the choice they are making.
It’s also important to remember that this discussion has focused primarily on the buyer’s decision-making process. In some situations, lenders, title companies, and title insurance requirements may influence that decision or even require a survey or ILC. Those topics are closely tied to Owner’s Extended Coverage and survey matters, which I’ll discuss in a companion article.