If there's anything amiss with a house you're thinking of buying, it's on you to find out what—and why. Information abounds, with C.L.U.E. reports, home inspections, historical records, and all manner of resources in play. So what's a good strategy for bringing together disparate evidence?
While it's true it's required for home sellers in many states, counties, and municipalities to disclose certain types of information, prevailing knowledge suggests that the burden of discovery still rests firmly on the buyer. Remember, it's demanding to sell a home, too. Unlike online referral services or the agents that work with them, sellers simply have no incentive to spend very much of their time on tasks like digging up property records.
Why Bother With Due Diligence?
Still, it's important that you research a property's history. Houses often are old and intricate structures with systems that exhibit tendencies to break down.
To find out what issues in a house might be chronic, it helps to work with all parties involved in the pending sale. At any point, you may be working with your agent, the seller, insurance companies, or lenders. Try to find a balance of trust in your agent and due diligence with respect to the property.
A practical note: the period of time designated for due diligence may leave you with several weeks or mere days in which to take such measures as finding a C.L.U.E. report, conducting a home inspection, and going on multiple showings. Whether you're in a time crunch or far from the buying stages, these five avenues will help you check what all has happened under (and to) the roof of that house.
1. Ask The Seller For A C.L.U.E. Report
A C.L.U.E. report details the when, the what, and the how much for insurance events that took place in a house's past. If a tree fell on the garage, for example, the report would tell you when the insurance claim was filed, what happened, and how much money was claimed. These reports issue from a consortium of insurance companies, each of which has agreed to pool information from all documented insurance events.
Again we see an instance where potential home buyers are incentivized to work with the seller. According to law, only homeowners may file for a C.L.U.E. report. Ask any sellers in your search whether they are willing to file for a C.L.U.E. report, and inform them these reports only go back five years and contain no personal information.
2. Make Insurance Inquiries
Another useful step to further the purchase process is to make inquiries from a homeowner's insurance company. Ask the representative to relay both the cost and feasibility for obtaining different types of insurance. If it's unusually expensive or difficult to get any one type of insurance, that indicates some degree of risk with the property.
Take flooding insurance. If you ask for a flood insurance quote and it's shown to be more expensive than is typical, that may indicate one of two main possibilities. Either the house has sustained significant water damage in the past, or else there is an increased chance the neighborhood will flood in the future.
3. Research The House's Ownership History
Again, there is a lot of property information out there, and much of this is concentrated within the category of ownership. Property reports online at a service such as homedisclosure.com offer a type of information more obtuse than insurance reports: you and your agent will have to work to decipher what's relevant and what's not.
As an aside, sites like homedisclosure.com also archive information about neighborhoods you may find useful early on in your search for a new home. Information available includes metrics on the area school system and statistics covering such areas as population and crime. These snippets can show the outline of a story about the neighborhood surrounding a house.
4. Ask Your Agent For Resources
If you've hired a buyer's agent, this person almost certainly has access to the listed house's MLS data, which can cement such variables as whether the house was recently sold, has been withdrawn and relisted, or spent a while on the market. Beyond that first stratum of information, there also are paid services to which your agent may be subscribed. Paywalls often conceal the final pieces of the proverbial puzzle of home ownership.
5. Check Historical Records
If the house in question is very old, situated in a historic district, or was designed by someone famous, its preservation may be a matter of public record. If you suspect that's the case, visit the local library and comb the archives for photographs and news articles about the house. Town newspapers a century and more ago concerned themselves more than today's with personal matters—like who owns which house.
If questions occur to you about home ownership generally, or if you're in the market for a house right now, you can advance towards your goals by working with a real estate agent. The agents we work with at Clever can uncover information otherwise unavailable which sellers may not even know about. They will work to save you money and secure the best insurance on the property. Find out more by working with a Clever Partner Agent in your area.