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How to Review a Seller’s Disclosure Report

Double-checking a seller’s disclosure report can save you heartache and money. But if you don’t read disclosures regularly, that means you could miss something important. Follow these tips from Trulia.com to spot potential red flags.

How old is your roof?

Roofs can last anywhere from 10 and 50 years, while tar-and-gravel roofs usually last 10 to 20 years. The popular composition shingle roofs usually last about 20 years, and the clay roofs on Spanish- and Mediterranean-style homes can last for more than 50 years.

Crawl space vs. cement slab

Crawl spaces are more accessible, which makes it easier to make repairs or upgrades. But adequate ventilation is important; otherwise, you might be dealing with mold. And all ventilation areas should be covered with screens to keep out wildlife. On the other hand, cement slabs can help you avoid mold or wildlife issues. But if tree roots or soil damages the slabs, it may cost you. Slabs also need to be removed to repair broken or leaking pipes.

Plumbing and pipes

Replacing your plumbing is a major expense. Note the age and type of your pipes. Brass, copper and galvanized steel can last 80 to 100 years. But polybutylene or lead pipes can mean trouble. These materials need to be replaced.

The HVAC and water heater

Gas water heaters usually last 10 years, while electric cones last for about 15. If the disclosure shows the water heater is that age or older, consider that it probably needs replacing. Even if the HVAC is working, an older system will run 40 percent less efficient than a new system, costing you much more on your monthly bill.

Cracks in the wall

Cracks could mean there is structural damage. Call in a structural engineer to look for foundation issues. A thorough inspection should be all you need to know whether you’re dealing with normal settling issues or something more ominous.

Animal damage

If the report is marked “yes” for animal damage, make sure it’s being dealt with properly. When you’re looking to buy, a few pest traps won’t suffice. You should probably interpret the seller’s claims of “handling it” to mean sealing the house properly to prevent the animals from entering in the first place, or hiring an exterminator. You also should ask for a termite guarantee.

Additional explanations or further disclosure

Be sure you don’t just glance over the “additional comments” part. Some items that could appear in this section include pending liens, restrictions or easements. Those could be deal breakers. Pending liens can tie up the property for some time, and restrictions or easements limit what you can do with the home.

Disclosures don’t necessarily tell all

Go with your gut and take note of suspicions along the way. Your next step is to look for things that don’t seem right, like a wall out of place, stucco that has been disturbed or unusual additions. It’s a good idea to get a CLUE (Comprehensive Loss Underwriting Exchange), which tells you a home’s history, such as prior damage. Most home insurance companies put claims in the CLUE database.