CLUE Report a Must for Home Buyers and Sellers
CLUE Report a Must for Home Buyers and Sellers
Earlier this week I wrote about the CLUE Report and how the information on these reports can affect the costs of your home or auto insurance.
A CLUE report can also be helpful to home buyers and sellers.
If you are buying a home it would be invaluable to learn about the previous insurance loss and claims history of the property before you make an offer. This is important to know as you will want to learn about the work performed to restore the property and learn how the loss history could affect the cost to insure to insure the property.
Since these reports are only available to those with a "permissible purpose", home buyers cannot simply obtain a CLUE Report on a home to satisfy their curiosity. For this reason, I advise home buyers to require the seller to provide a CLUE report as a provision in their purchase offer, or purchase and sale agreement.
You can order A CLUE Home Seller's Disclosure Report from LexisNexis for about $20. The Home Seller's Disclosure Report provides information about insurance losses at a property address and does not include the personal information that the home seller wants to keep private.
As is the case with CLUE Reports, the Home Seller's Disclosure Report includes losses and claims reported only within the past five years, so losses reported prior to that would not be included. But as is the case with many losses, collateral damage from the loss (such as mold caused by extensive water damage) would typically be evident within a short period after the initial loss.
Individuals selling their home are strongly advised to get a copy of this report in advance. If your home has not experienced a loss in the past five years the report would indicate "no losses found for the address requested". This can provide a competitive edge and comfort to a potential buyer. Also, home sellers will want to make sure there are no errors or inquiries that create the "tainted house" scenario. Errors can be reported directly to LexisNexis and they will ask for clarification from the insurance company involved. Home sellers should also have detailed records of any restoration and remediation work performed that was related to the loss and claim on the report.
Ray Martin
View all articles by Ray Martin on CBS MoneyWatch»
Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.
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