THE DISCLOSURE PACKAGE THICKENS
The Purchase Agreement requires that the Seller completes the Supplemental Statutory and Contractual Disclosure (SSD) and the new Seller's Property Questionnaire (SPQ). In these forms the Sellers is asked to disclose insurance claims that were made on their property within the past 5 years. With no other reference, the Buyer must rely solely on the information that the Seller provides on the SSD and SPQ. The Seller's answers may, or unintentionally may not be accurate. Many Sellers may not be aware of insurance claims reported against their property. Not commonly known, for example, is that service provided by a Home Warranty company for seemingly minor repairs or appliance adjustments may be considered a claim. If the Seller has owned the property for less than 5 years, he probably doesn't know about any insurance claims, if any, made by the previous owner.
WHY ORDER AN INSURANCE CLAIMS REPORT?
When a homeowner files an insurance claim on his property, both the claim and the repair are reported to a common property database. The insurance carrier will rely on the insurance claims report from this property database, not the Seller's SSD or SPQ, to establish the premium for the property's new insurance policy.
The findings of the insurance claims report may make a difference to the Buyer. The report may reveal chronic problems with the property that did not show up during the home inspection. In extreme situations, eg unresolved water damage, the insurance policy may be denied causing the property to not qualify for a loan and the sale to cancel. That rarely happens. The lender can always find a company that will insure. More typically, a report showing a long history or specific kinds of claims incurs a much higher insurance premium than anticipated for the property. This too may cause the sale to cancel.
It is in the interest of all parties to know the 5 year history of insurance claims sooner rather than later in the transaction. An unbiased disclosure in the beginning means no surprises at the end. Additionally, the report itself takes on the liability for the information rather than the Seller or his Agent.
A-PLUS PROPERTY DATABASE : INSURANCE CLAIMS REPORT
by FIRST AMERICAN NATURAL HAZARD DISCLOSURE (FANHD)
The A-Plus Report is issued by First American Natural Hazard Disclosure (FANHD). A-PLUS is a division of and is supported by one of the largest and most reliable companies in real estate, First American Title Company. REMERGE is proud to affiliate and endorse A-PLUS and the First American Family of Companies.
The Seller is asked on various forms to disclose many factors that affect his property. He cannot possibly know environmental, governmental and insurance records unless he is a professional in that field or he takes the time to research public records and/or subscribe to different information database. REMERGE affiliates with services that both provide and take responsibility for such information.
THE UPDATED REMERGE DISCLOSURE REPORT PACKAGE
Effective 9/1/2005
1. Property Disclosure Services, A First America Title Company: Mandatory Zone Disclosure Report
2. A-PLUS Property Database, A First America Title Company: Insurance Claims Report
3. CA Tax Data: Property Tax Report
MANAGING THE INSURANCE CLAIMS REPORT IN LISTINGS AND SALES
SELLER'S SIDE
The insurance claims report is not mandatory yet. However, the potential impact of the information revealed is dramatic enough that the updated REMERGE policy is to order an A-PLUS Report as well as the Zone Disclosure and Property Tax Reports for all Seller's Disclosure Packages. The cost of the A-PLUS report is $25, paid by the Seller.
BUYER'S SIDE
Since the insurance claims report is not mandatory yet, REMERGE can only order the A-PLUS report IF you specifically ask that the Seller provide it on the Purchase Agreement as follows:
Page 2 of the Purchase Agreement
Item 4. Allocation of Costs
B. Other Inspections and Reports
(4) and (5) Are blank for the Buyer to request additional reports
Add the following request to line (4) or (5) like this:
(4) Buyer Seller shall pay for A-PLUS Insurance Claims Report $25, REMERGE to order.
Sellers and Buyers engage Agents to guide them through the real estate process. Disclosures protect the Seller from the Buyer. They also protect the Agent(s) from both the Seller and the Buyer. In the event of a lawsuit, your transaction file will show due diligence when it includes the Buyer's signed receipts of unbiased reports that go beyond the Seller's own knowledge of material issues that affect the property. So, don't be shy! ASK!
DUPLICATE FILES - CD or PAPER: $35
Effective for new orders closing after 9/1/2005
REMERGE Basic Service includes 1 complete transaction file that is delivered to your Broker for his records, per D.R.E. requirements. Agents, Buyers and Sellers receive an order form in their disclosure package so that each can order a duplicate file in either hardcopy paper or CD format. The cost of only $35 includes shipping and handling.
The duplicate file charge is invoiced to escrow IF REMERGE receives the order form anytime while the transaction is in process. The cost to recall and duplicate a file from REMERGE Electronic Archives after the close of escrow is $75. Save over 50%! Order your duplicate file while the transaction is in OPEN status.
Access to the contact information and reference numbers as well as the content of your complete transaction file inventory is on-line at www.remerge.com in CLOSED status after the close of escrow.
ENJOY YOUR LABOR DAY WEEKEND!
MONDAY, SEPTEMBER 5th
REMERGE
Transaction Coordinators
Adept & Loyal
YOU DON'T HAVE TO TRAIN US.
WE DON'T QUIT ON YOU.