Q. What is a REDreport ?
A. "RED" is a trademarked acronym for Real Estate Disclosure. A REDreport is Real Estate Disclosure (RED) statement that is made by all real estate professionals, such as attorneys, brokers, agents, appraisers and property inspectors. A REDreport combines a proprietary research process that combines on-site research with on-line database searches. The on-line searches use high-tech satellite mapping (GIS) and governmental agency database searches, for a total of 34 key disclosure issues on-line. With this combination, it provides a very thorough disclosure. There are two versions of the REDreport, the 20 Questions Format and the Itemized Format.
Q. What are the differences between the 20 Questions Format® and the Itemized Format?
A. It is a matter of preference for the real estate professional. All versions of the REDreport offer the choice between the two formats. The 20 Questions® Format is based upon the 20 Questions® and is more straightforward. The Itemized Format has over 130 items to individually consider.
Q. What are the 20 Questions®
A. The 20 Questions® cover the spectrum of disclosure issues that should be addressed in any real estate transaction or appraisal.
Q. Who uses a REDreport ?
A. Anyone involved in real estate. This includes banks and lenders, property owners, property managers, buyers, sellers or anyone that has an interest in a full disclosure or description of a property. Buyers and lenders use a REDreport before making offers or loans so they know "what they may be getting into". Sellers, brokers and appraisers use a REDreport to meet their ethical and legal obligations. Property inspectors offer a REDreport in addition to their reports that just address the improvements.
Q. What will the REDreport tell me?
A. The report will disclose the known conditions to the party completing the report. This includes known environmental contamination, landfills, airport proximity, soil problems, construction defects, repairs that are required, natural hazards and conservation issues. On line, 34 databases are searched that may take hours manually.
Q. Can I see a sample REDreport?
A. Sure, click here.
Q. What do the various acronyms mean on the REDreport ?
A. The following acronyms are explained:
Q. Why is disclosure necessary?
A. There are numerous Federal and state laws that mandate a full disclosure or description of real estate. Federal guidelines mandate a full disclosure and description of the subject property by appraisers, and 29 states have disclosure laws for brokers and agents. A few years ago, this information was not all readily available; however, today a judge or jury will likely have less sympathy for real estate professionals who do not meet their disclosure obligations when the information is so easily obtained.
Q. How does the REDreport assist me, as a real estate professional?
A. The REDreport format is a proprietary system that facilitates both on-line and on-site research. Using the REDreport reporting system, the process is organized and saves considerable time over what it would take manually to complete the research.
Q. Are there any issues that should not be disclosed?
A. Care should be taken to just disclose known "facts". Extreme caution should be exercised before "disclosing" any rumors or speculative issues. (For example, a crack should be disclosed simply as a "crack" and not speculating on it cause, such as "subsidence", "tree roots" or anything else without a proper soil test). There are restrictions on disclosing an AIDS related death. Always consult with an attorney when a question of disclosure arises.
Q. Im an appraiser. How would I implement a REDreport into my appraisal report?
A. The REDreport is an excellent tool to provide a superior subject property description. The report itself can be attached as an addendum to an appraisal or as a stand-alone report in an appraisal consulting assignment. Like any descriptive issue, those IDs that impact value are analyzed within the valuation section of the report.
Q. I have a disclaimer that basically states that I am not an environmental or geotechnical engineer, so I do not have the expertise to report on these types of issues. Why do I need to use the REDreport?
A. Without an engineering background, you may not be qualified to take soil samples or interpret laboratory data; however, real estate professionals have a duty to disclose readily available public information, such as risk sites that are published by environmental agencies. It is critical to alert the client of such readily available information, so that they have the opportunity to contact the appropriate engineer and commission a further study if necessary.
Q. Do I have to use the REDreport online service to complete a REDreport?
A. No; however, to fulfill your disclosure duties, you will need to manually search the same Federal and State environmental agency databases, Federal historical registers, pipeline, rail and electric utilities and the other data, and report the results to your client. The REDreport online service simply provides this information more conveniently.
Q. Im a broker or agent. How would I implement a REDreport into my practice?
A. The REDreport is an outstanding "Table of Contents" to organize your disclosure paperwork as required by law or in-house brokerage policies. The disclosure report can be filled out by you and your client and combined with the on-line research. Any disclosure forms required by your state will fall into one of the REDreport's 10 Categories and can also be added as attachments.
Q. Im a property inspector. How would I use the REDreport ?
A. The REDreport may be offered to clients as a greater "inspection" of more than just the building improvements. The REDreport covers the spectrum of issues.
Q. My clients are lenders. Cant they just get a REDreport without me?
A. They can, but it requires BOTH an on-line search and an on-site visit to complete a REDreport. Unless they physically visit the property, the REDreport cannot be properly completed.
Q. How do I obtain training to use the REDreport in my professional practice?
A. It is highly recommended that real estate professionals attend the one-day Real Estate Disclosure Seminar. The seminar is taught nationwide.
Q. How do I order the on-line portion of the REDreport?
A. You can obtain instructions by clicking here.
Q. Where does VISTAinfo get the data for the REDreport?
A. The data used to populate the 34 areas of the REDreport is gathered from various public sources and governmental agencies. Specific listings are also located at the end of a complete REDreport. In general, the data is obtained from a variety of sources using the Freedom Of Information Act (FOIA) process. Then the data is enhanced by VISTAinfo, plotted in a uniform GIS system and used in creation of the reports.
Q. How often is the data updated?
A. Each database is updated on a different schedule based on the type of data. Some data is updated annually, while many datasets are updated quarterly. Some databases, such as flood plains, do not get updated very frequently. All data updates are automatically loaded into the web system for your use. Update dates are posted at the end of each report for reference.
Q. How do I get an account with VISTAinfo?
A. Please go to setting up an account and fill out the electronic form and e-mail it to the requested address. Your information will be processed and you will be contacted and given an account number and password. Once you have an account number and password you will be billed monthly for REDreport usage.
Q. What if there is a risk site found near the subject property?
A. This must be decided on a case-by-case basis by the real estate professionals involved. Some may merely require disclosure and some conditions may warrant further research. If a question on any impact on value arises, the Appraisal Institute has published the book, "Real Estate Damages" which sets forth the methodologies for damage valuation.
Q. What is the difference between sites listed in the RED search radius and those found in the AREA search radius?
A. REDreports are available in three formats, RED1, RED2 and RED3. Sites in the RED1 search radius are closer to the subject site and are indicated on the REDreport form. Sites found in the more distant AREA search radius are outside of the RED1 radius, but are in the general area. Note that only the RED2 and RED3 versions have an expanded AREA search radius beyond the basic RED1 radius.
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