With the substantial inventory of REO properties on the market, many purchasers have the opportunity to purchase well below market. The turnaround time for a response and acceptance from a seller may not take as long as a short sale. However, with properties empty for periods of time sometimes homes fall into disrepair, or fall victim to theft or vandalism. Either of these could be determined during the initial viewing, home inspection or even the final walk through.
Sometimes, it is harder to determine is the home’s history. Sometimes inspectors can find evidence of previous water damage, fire damage or structural deficiencies. But sometimes the evidence isn’t easily seen.
Purchaser’s could add a C.L.U.E. Report (Comprehensive Loss Underwriting Exchange) addendum to their contract. The report contains consumer claim information provided by insurance companies.
Even if ownership of the home changes, if the insurance company can show the relationship and likelihood of future loss to the home they may use the information contained in the report. This could potentially mean higher rates or even the possibility of owners not obtaining certain coverage, such as flood insurance.
Inquiries about possible claims and coverage are not reported to C.L.U.E. Reports need to be pulled from the owner, insurer or lender of the property. Reports have been scrutinized for containing inquiries and wrongful information. Notes can be added by consumers with regards to previous claims. The reports contain seven years of claims history.
There have also been incidents over security where fake businesses were using reports to obtain information about others. There has also been additional criticism over reports causing transactions.
Sherwin L. Sucaldito, REALTOR®
Member of The Institute of Luxury Home Marketing
Member of the Real Estate Buyer’s Agency Council, ABR
Certified Residential Property Manager, CRPM