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Archive for Friday, January 23, 2009

Get a C.L.U.E. about your next property

January 23, 2009

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We are selling our longtime home and have picked out a new one that we want to buy. We are following your advice to make our purchase offer contingent on getting a mortgage to finance the transaction and on obtaining a satisfactory home-inspection report, but our real estate agent suggests that we also make the offer contingent on obtaining an acceptable report concerning any history of the home’s involvement in insurance claims. Is this really necessary? How would we get such a report — would we simply have to take the seller’s word for it?

No. Instead, for about $20, you can order a formal “C.L.U.E.” report, based on information from the national Comprehensive Loss Underwriting Exchange.

It certainly would be a wise investment, as well as a smart contingency to include in your purchase offer. About 90 percent of all insurance claims are reported to the exchange, which is a nationwide database that insurers use to share claim histories.

If I were selling my home today and had not filed an insurance claim in the past several years, I certainly would pay the modest fee for a C.L.U.E. report on the property and provide copies to prospective buyers. A clean report can make a buyer feel more confident that the property has been relatively free of various claims, especially such major problems as flood damage or mold.

Conversely, if I were a buyer, I also would make my offer contingent on getting both a satisfactory C.L.U.E. and a good inspection report on the home well before the closing date to reduce the chance of running into problems later. Virtually all lenders require buyers to obtain an insurance policy before a loan application can be approved: If the C.L.U.E. report shows that the target property has been involved in more than one or two claims in recent years, you might not be able to arrange a suitable homeowners policy, and the bank may subsequently deny the loan.

The C.L.U.E. system is operated by Georgia-based ChoicePoint Asset Co. You can order a report by its Web site (www.choicetrust.com) or by writing to C.L.U.E. Inc. Consumer Disclosure Center, P.O. Box 105295, Atlanta, GA 30348-5295.

Where will President Bush live after the White House?

It appears that he and his wife, Laura, will live in a four-bedroom, ranch-style house in the upscale Preston Hollow area of North Dallas. A trust that Bush created after he became governor of Texas in 1995 recently purchased the 8,500-square-foot, 1.1-acre property on his behalf for about $5 million.

The home is just a few miles away from the site where Bush plans to build his presidential library. It’s also close to the first lady’s alma mater, Southern Methodist University.

A White House representative also says that Bush will keep his sprawling ranch in Crawford, Texas, as a “getaway spot” for the president to relax when he’s not giving post-presidential speeches.

My mom and dad both are 66 years old, and recently formed a basic living trust so their home and other assets can avoid probate and instead pass quickly to me and my sister when they die. My parents are in good physical and mental shape, so they are serving as co-trustees, but they have named me “successor trustee” to administer their estate upon their death. How does this process work? Is there anything I must do immediately?

Legally, you don’t have any immediate responsibilities. But it would be wise to do a little voluntary legwork now to make things go as smoothly as possible later.

As co-trustees, your mother and father will co-manage the trust’s assets as long as they are capable. When one dies, the other will become sole trustee. Your official duties won’t begin until the second one passes, or becomes physically or mentally unable to run the trust’s affairs.

Although your services probably won’t be required for several years, it would be helpful if your parents provide a copy of the trust now so you can see what’s in it and collect valuable account information that will be needed later. They might balk at the request out of privacy concerns or fears that disclosing who gets what now could start a family feud. If that’s the case, at least ask them to tell you where the trust documents are kept so you can access them when it becomes necessary.

Also make sure that you have a complete list of contact information for the professionals they use — especially doctors, lawyers, estate planners, accountants and the like — all of whom you probably will need to consult sooner or later.

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