Additional precautions that buyers should take (or make sure that their agents take) before buying a home, especially a For Sale By Owner (FSBO) home include:

1. Secure a seller's permission to buy what's known as a "C.L.U.E. report". This is a five-year insurance claims history of a particular property.  C.L.U.E. stands for Comprehensive Loss Underwriting Exchange. A C.L.U.E. report is similar to a credit report, but with insurance-claims data. The reports require seller permission, but cost only $10, or so, and are available online from a company called Choice Trust.

C.L.U.E. reports will reveal any claims that sellers haven't mentioned. But, equally important, they will help buyers who have become owners. Many buyers purchase a one-year initial insurance policy when closing on a home. Most insurers will, at renewal, look at a C.L.U.E. report to evaluate recalibrating rates and coverage.
 

If a C.L.U.E. report wasn't used initially owners may get a rude awakening upon learning their own, or their home's, insurance history is damaging. Insurers can cancel on you if you don't get a good C.L.U.E. report!   Click on the link to find out more

2. Get a competitive market analysis (CMA) for the neighborhood where the home is located. Real-estate agents, even if not involved in the transaction, may be willing to provide them. This is a document that outlines selling prices on homes of varying sizes in different neighborhoods. Separately, this company will, for a small fee, sell property-value data gathered from tax assessors' offices, at either the street address or ZIP code level.

If you can, try to research recent FSBO sales in your neighborhood. A CMA will only represent MLS data, that is, data on homes sold by agents, which exclude homes sold by owners; so "it's not the whole picture." 

3. Hire a "vicious" home inspector to check over the house from top to bottom.  Many sellers aren't lying to buyers when they don't disclose problems in their home, many times they just don't know or tell the extent of a problem.