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What is a CLUE Report and Why Do You Need One?

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Real Estate Agent with Movoto DRE #01485322

 What is a CLUE Report and Why Do I Need One?

 

First, CLUE stands for Comprehensive Loss Underwriting Exchange.  A CLUE Report offers a history of reported insurance claims on a property going five years back.

 

Sellers are obligated to disclose any information about which they are aware regarding the property.  Additionally, the seller will complete disclosure forms such as the Real Estate Transfer Disclosure Statement (TDS), Seller Property Questionnaire (SPQ) and Supplemental Statutory and Contractual Disclosures (SSD) and provide them to the buyer.

 

*Banks are exempt from providing the disclosures mentioned above.

 

Let's suppose a seller simply forgot about when the toilet leaked and an insurance claim was made.  This actually happened on a transaction where I represented the seller.  The incident was revealed in the CLUE Report.  The buyers asked for documentation that the repairs were completed and the sellers were happy to provide it to them.

 

The CLUE Report offers buyers an additional layer of security by obtaining information from a third party source.  

 

It is a good practice for a seller to order a CLUE Report at the time of the listing so it is available to prospective buyers for review.  In my experience, the vast majority of CLUE Reports have come up clear, but it's still important to have one.

 

A CLUE Report maybe ordered by visiting https://personalreports.lexisnexis.com/homesellers_disclosure_report/landing.jsp

 

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JILL MURTY | 949.355.5321 | JillMurty.com

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Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Jill, and we all need to understand that the CLUE report is not always accurate.  Case in point. I am selling a fire damaged home. Insurance claim was made and paid  and the seller abandoned the property.  Current CLUE report show no claims filed.

Dec 01, 2015 02:07 AM
Bill Reddington
Re/max By The Sea - Destin, FL
Destin Florida Real Estate

Lots of Insurance agent in this area run the report on any new coverage. No surprises.

Dec 01, 2015 06:46 AM
Troy Erickson AZ Realtor (602) 295-6807
HomeSmart - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Jill - I will just reiterate what Adam Tarr said. Here in Arizona we often just go directly through the home sellers insurance company for a 5 year experience letter. It is free, and more often than not, the insurance agent can produce one within an hour or two.

Dec 01, 2015 07:26 AM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Excellent advice regarding what is required for disclosure in your area.  We have Seller Property Disclosure Statements for full disclosure, and a CLUE is required by my office.  I agree with Troy & Adam above!

Dec 01, 2015 07:59 AM
Jill Murty, Realtor - Orange County, CA
Movoto - Laguna Niguel, CA

They sure can forget and most often it's totally innocent John Meussner.  

You're right that a lot of people have no idea this report exists Rob Arnold.  They're not mandatory (they are for my broker), but it's probably heading that way.

Thanks Laura Allen, Lake Tahoe - Truckee Real Estate for Sale www.TahoeLauraLuxuryHomes.com!

You're a funny one John Wiley. 

True David Baker Realtor - Laveen Homes for sale.  

Dec 01, 2015 09:09 AM
Jill Murty, Realtor - Orange County, CA
Movoto - Laguna Niguel, CA

Thanks Carol Williams.  Intentional pun appreciated.

It's not a requirement (except by my broker), but it may be in the future.  I agree it's not surprising that it's in California, the home of over regulation Drick Ward.

In case you ever need a report Silvia Dukes PA, REALTOR, CRS, CIPS, SRES, head to the LexisNexis website.  The link to the page is at the bottom of the blog post.

Gene Riemenschneider - I used to order the report through the NHD company.  They stopped providing them, but they can now be obtained through LexisNexis.  The link to the page is at the bottom of the blog post. 

Dec 01, 2015 09:23 AM
Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

A simple explanation. Thank you! Interesting what you guys have there. In Texas we don't have those exact disclosures.

Dec 01, 2015 12:03 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Jill congrats on your feature, funny I wrote a post the other day about the CLUE report, great minds think alike:))Endre

Dec 01, 2015 01:41 PM
Ron Aguilar
Gateway Mortgage Group - Saint George, UT
Mortgage & Real Estate Advisor since 1995

Although a CLUE report may not be required in your area, the topic still deserves consideration...

Dec 01, 2015 10:28 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Jill Murty, Realtor - Orange County, CA 

This is valuable information for those without a clue.

Getting a CLUE report is essential IMO and recommend it be included in the offer. But they are not always accurate. I had one with over $11K for a claim that turned out to be a personal bike accident for the home owner and not something about the home - good news in this case for the buyer. Buyers shouod always investigate insurability as well as obtaining a CLUE.

As far as I know the disclsoure companies will no longer be able to provide these as of 12/1/2015

Dec 02, 2015 12:07 AM
Dana Cottingame
Coldwell Banker Residential Brokerage - Dallas, TX

I had an experience similar to Jeff Dowler's. My clients forgot a fire in their personal home they were selling, but in addition a rental property they had lived in had a fire in the 5 year window. The report made it sound like the subject property had had multiple fires.  Once we reviewed the report we were able to explain what happened. The deal closed, but it was my first experience with a CLUE report.  I do recommend the buyers arrange homeowner's insurance during the option period so it doesn't become an issue late in the transaction.

Dec 02, 2015 01:06 AM
Jill Murty, Realtor - Orange County, CA
Movoto - Laguna Niguel, CA

Joan Whitebook - Maybe the insurance agent furnishes the same information but calls it something else?  If it is called a CLUE Report in your area, I may have questions about that agent.

Very well stated Fred Griffin.  Thanks for sharing your great insight.

If the insurance carrier or agent will give up the info, I think that's a terrific way to get it Kimo Jarrett.

You're funny Praful Thakkar.  Glad to know you're no longer CLUE-less.

Thanks Sharon Parisi.  It sounds as though you have nice, cooperative insurance  agents in your area.

Dec 02, 2015 03:51 AM
Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Jill,

Amen!

Dec 02, 2015 07:54 AM
Mark Lomas
Santa Barbara Real Estate - Santa Barbara, CA
Experience You Can Count On!

Great post...unbelievably not all real estate professionals are on top of this!

www.TheRealEstateScene.com

www.TheRealEstateConcierge.com

Dec 04, 2015 03:27 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Good idea to get the CLUE report prior to listing a home.  That way, you know what you are dealing with.

Dec 05, 2015 01:12 AM
Jill Murty, Realtor - Orange County, CA
Movoto - Laguna Niguel, CA

That's funny Diana Dahlberg.

Thanks Nina Hollander.  It doesn't surprise me at all that you're one of the ones in the know about CLUE Reports.

Sellers can go online and get the report.  One day, we may be allowed to do it for them Sheila Anderson.

Your point is VERY important Kathleen Daniels!   Thank you for making it

Dec 08, 2015 05:22 AM
Jill Murty, Realtor - Orange County, CA
Movoto - Laguna Niguel, CA

It's a good practice for insurance agents to do that Bill Reddington.

I like the method you describe Troy Erickson; quick, cheap and efficient.

A CLUE Report is required by my office, too Jan Green.

Thanks for stopping by Greg Nino.

I'm sorry I missed your post Endre Barath, Jr.  Great minds for sure.  ☺️ 

Dec 08, 2015 05:28 AM
Jill Murty, Realtor - Orange County, CA
Movoto - Laguna Niguel, CA

A CLUE Report is required by my broker, but I don't think the BRE requires it at this time Ron Aguilar.

A CLUE Report isn't perfect, as you outlined in your rear life experience.  Glad it all was sorted out and worked out for the buyer.

You're correct Jeff Dowler CRS that the disclosure companies can no longer supply the report.  It can ordered by following the link at the bottom of the post.

Good for you for untangling the fire information and getting it straightened out Dana Cottingame. It's definitely a good idea to make sure a property is insurable early on in the buying process. 

Dec 08, 2015 05:38 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Jill Murty, Realtor - Orange County, CA ~ hi Jill... I've known about CLUE reports for what seems like forever and discuss them with my clients. Always amazed to find out how many people and agents have never heard of them.

Dec 08, 2015 08:06 PM
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Should always be a part of due diligence, I agree. Like Nina Hollander we find that even some agents have no clue about CLUE reports!

Dec 21, 2015 08:06 AM
Pete Xavier

; )

Dec 21, 2015 08:36 PM
Nina Hollander, Broker

Pete X with X Group Real Estate Advocates, Huntington Beach, CA 714.459.2017 OCLister.com ~ and no pun intended, right, Pete?

Dec 21, 2015 08:32 PM
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