The C.L.U.E. report is an independent source of information about the insurance claim history for a given property and individual over the most recent five years. The seller must obtain the report, so the buyer must make it known that they would like the seller to obtain a copy.
Review of the report benefits both the buyer and the real estate broker representing the buyer. The buyer has the advantage of seeing if any claims have been taken out on a home. Supplementing the home inspection with the C.L.U.E. report amplifies the buyer’s ability to detect potentially costly latent defects, especially for areas that were inaccessible during a home inspection. It is not a catch-all solution, by any means, since owners do not report or take out a claim on all problems, but the report can reveal major structural defects and problems the owner has cleverly disguised.
In addition, the buyer can detect potential trouble in insuring the home before they make the decision to purchase it. Home insurance premiums can go up based on the claims tied to the property–despite the purchaser’s good risk rating. A higher premium can also cause a PITI payment to become unaffordable or bump the debt-to-income ratio up to the point where the client no longer qualifies for their preferred mortgage product.
Don’t make an offer without requesting it!