In this age of full disclosure, an increasing number of potential buyers in the Atlanta area are requesting a CLUE Home Seller’s Disclosure Report when preparing to place a bid on a property. Before putting a house on the market, sellers must understand the information presented in a CLUE report and the ramifications of filing property insurance claims.

What is a CLUE report?

CLUE stands for “comprehensive loss underwriting exchange.” This report is generated from a database of insurance companies’ paid claims on property losses. CLUE reports detail five years’ worth of insurance payments related to a specific vehicle or a property address. CLUE reports inform a potential buyer about a property, but sellers should note that they don’t reveal personal information about the house’s current owners. 

How should a seller respond to claims listed in the CLUE report?

The CLUE report falls under the Fair and Accurate Credit Transactions Act, which entitles property owners to obtain a free copy of their CLUE report before placing their home on the market. You may request a free CLUE report through the LexisNexis consumer disclosure center.

If you find a claim listed on your report, be prepared to provide additional information to potential buyers upon request. Also, be aware that the five-year reporting period may cover a time when you did not own the home. If you see something on the report that you believe to be untrue, you can file a dispute with the reporting agency.

How should buyers use the information in CLUE reports?

Buyers should think of CLUE reports as just one more piece of the puzzle when they are putting together an offer on a new home. CLUE reports help identify potential issues that could affect the price of the home, or they could indicate future problems with a property.

No home is perfect, and property insurance claims are expected from time to time. However, if you see repeated claims, that might signal an underlying problem that requires further investigation. A home in Cumberland that has had frequent water damage, for example, may need a second look. Or a fire loss claim for that Dunwoody three-bedroom may tell a buyer to pay extra-close attention in a home inspection to see if there has been any long-term damage or existing electrical problems.

CLUE reports are becoming an important disclosure for both home buyers and sellers. Familiarizing yourself with the contents and format of the report before entering into a real estate contract will help the process go smoothly and give you more confidence in your ultimate decision.

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