So you’re looking for a new home. There’s nothing more exciting than taking a look at what your future might look like and how you’re family will grow and evolve in that home. A home that will create memories, build dreams and lead you through the different phases of your life. Yes, that’s what everyone wants. But what if you get it wrong by making a bad home purchase? Everything you dreamed about could come crashing down in an instant and change the course of your future forever. That’s why it’s so important that you do your homework before buying any given home. And that includes learning the home’s property history.
Knowing a home’s property history is not always something people consider before making their final decision. However, knowing the property history, is the one thing that could mean the difference between your happiness or a nightmare that never seems to end. That’s why we are going to give you some key questions you need to find the answers to regarding any home’s property history, before you even think about signing on the dotted line.
1. Have There Been Any Crimes, Deaths or Other Incidents in This Home or On The Property?
In all the excitement of buying a new home, you might not have thought to check into whether or not there have ever been any crimes or deaths and so on in the house or on the property. Knowing this information would help you make the decision about whether you want to buy this house or find another one. All states have laws regarding these issues; therefore, you will have to check the laws in your state before you assume anything. Unfortunately, some realtors have an unspoken rule that they won’t divulge that information unless you ask. Caveat Emptor or buyer beware is the rule, so always ask and get it in writing.
Why would you really need to know this information? Well, any house where a death, murder, suicide, serious illness (such as AIDS) has occurred, or if there is a belief that the house is haunted, could be labeled a stigmatized property? For example, other than the fact that you might not want to live in a stigmatized property, it will generally take about 50 percent longer to sell than other homes and will usually sell for significantly less than a home that’s not stigmatized. Another example is that if the house was previously a “drug” house or meth house, it might not be safe for you to live in. There is a website called diedinhouse.com that will let you search any address in the country to find out if someone has died in that house; however, there is a minimal charge for the search results.
2. What Is the Property Owner and Sales History Of This Home?
Before you buy any house, you should determine how many previous owners there were, the history of each purchase and selling price and so on. If there have been any dramatic increases in the home’s value over a short period of time, that could mean an addition or other type of room has been added, or some other type of major renovation has been performed. If that’s not the case, this information could be a good indication about whether the neighborhood is stable or in decline. Additionally, if you see the property values going up year over year, this will help you determine the appreciation value so you know approximately how much more you will have to pay each year for your annual property taxes. But would there be a problem if someone did build an addition onto this home or some other type of major renovation? Well, that depends and that’s what we’re going to talk about next.
3. What Are the Tax and Lien Records for This Home?
If your research uncovers that a previous owner built an addition onto that home or if any major renovations were performed, that’s great. Unless, the inspection reveals that those additions and/or renovations were not permitted. In which case, those particular renovations would have to be removed. You could try to see if the city will go ahead and permit them, but generally, if the renovations were not permitted initially, there’s probably a reason, which usually results in the renovation having to be removed and put back into its original condition.
4. What Is a C.L.U.E. Report and Do I Need One?
Now that you are beginning to get a clearer picture about your potential home, there is another bit of research you need to perform, if you don’t want to get stuck with a money pit. And that is to pull a C.L.U.E. report. What exactly is a C.L.U.E. report? C.L.U.E stands for Comprehensive Loss Underwriting Exchange. This report is provided by a group of insurance companies who have agreed to voluntarily share any historical loss information on a given property anywhere in the country. This would include information such as the date of the loss, the type of claim it was, the amount of the claim that was paid by the insurance company and so on. As a potential buyer, this information would provide you with some valuable information about the home’s property history, especially if you see the same recurring issues.
The gathering of C.L.U.E. reports began in the 1980’s and started by building a database of property, auto and individual loss information. This helps insurance companies predict the potential for losses, which in turn helps them determine their rates, among other things. You can request a C.L.U.E report from LexisNexis and should carefully review it before you buy any home.
5. What Red Flags Should I Look for On a C.L.U.E. Report?
The best indication that your potential home might have a problem is if you see the same recurring issues. For example, if you keep seeing issues regarding water damage, that could indicate the home has a plumbing problem of some sort. Or that the home frequently floods if it rains excessively. Or if you see several reports of broken pipes, it could indicate that the pipes were not installed and/or insulated properly. It could also mean the home might have a foundation problem. So as you can see, taking the time to review the home’s C.L.U.E. report could ultimately prevent you from making a buying mistake that might end up costing you thousands of dollars over time. Being an educated buyer and learning the property history of a home is your best bet at buying a house that you and your family will love and enjoy for years to come.
2 Point Highlight
1. Knowing a home’s property history is not always something people consider before making their final decision.
2. Knowing the property history, is the one thing that could mean the difference between your happiness or a nightmare that never seems to end.
