interesting new service....you still need a home inspection....Denver Post
Before buying a
computer, you might read a review on CNET.
Before buying a used truck, you might order a
report from Carfax.
But for the most important purchase — a home
— much of the due diligence isn't performed until after a contract has been
signed, via the professional home inspector.
A local dot-com aims to change that.
Beginning in late April, house hunters will
be able to order a "Housefax," a comprehensive report on a property's history
that includes information about insurance claims, building permits, fire-related
incidences, meth-lab and sinkhole hazards and other data.
Housefax.com, with dual headquarters in
Boulder and northern Virginia, will charge between $39 to $79 per report,
delivered instantly via e-mail.
"Before you even put a deposit down and sign
a contract, this tool should be applied," said company president Michael Abdy,
an entrepreneur who also happens to be a licensed Realtor and an undergrad at
the University of Colorado at Boulder.
Though the official launch is a month away,
the foundation for Housefax was laid more than a decade ago.
Haymarket, Va., insurance veteran Eddy Lang
registered the Housefax.com domain after reading reports about the late
entertainer Ed McMahon's battle in 2002 with an insurance company over
toxic-mold contamination in his Beverly Hills house.
When McMahon secured a multimillion-dollar
settlement, insurance companies started excluding water damage and mold from
coverage, Lang said.
He added, "That's when I was like, 'what can
we do to inform people that there's water damage before they go through the
process of getting a loan and getting all fired up about the house and then
finding out they can't get insurance on it.' "
With 18 years in the insurance industry, he
knew insurers had access to claims history via the so-called Comprehensive Loss
Underwriting Exchange report.
Lang launched a beta version of Housefax in
June that included loss history and other data. But the reports, a hodgepodge of
information, weren't neatly structured. Lang also didn't throw any marketing
behind the site.
Enter Abdy. On the Sunday before
Thanksgiving, while house hunting in south Florida, a beachfront property caught
the business
wunderkind's eye. He turned to his 60-year-old father, who has four decades
in the real estate business, and asked for his thoughts.
"He's prancing around the backyard, poking
his finger in the siding, looking at the roof," Abdy recalled. "He said, 'This
house has problems.'"
That's when the idea for the business hit
Abdy.
After an associate told him that Housefax.com
was already taken, he called Lang later that evening, offering to buy the
domain.
Having already received about a hundred
similar inquiries, Lang declined.
Abdy called again the next day, this time
offering to partner with Lang, who was mulling another buyout from a Fortune 500
company.
"If it's going to change your life, take the
offer," Abdy told Lang about the proposal from the Fortune 500 firm, which
included a temporary contract for Lang.
Three days later, Lang called back.
"The concept and the idea was more important
than some life-changing money," Lang said. "I want to see this thing
through."
They closed the deal in February. Lang holds
the title of Housefax CEO.
It is a portfolio company of Boulder-based
TeQuity Capital & Communications, an early-stage investment and
business-development company Abdy and public relations firm Metzger Associates
launched last
year.
Abdy cold-called Allan Dalton, the former CEO
of Realtor.com, and reeled him in on the advisory board.
By eliminating last-minute discoveries,
Housefax "very well may lead to the preservation of more transactions," Dalton
said.
"We're in an age of transparency," he said.
"When people are confused, it's unlikely that they make decisions."
Housefax will have exclusive access to data
from Fire Information Systems, a New York-based company that has compiled
information about 62 million fire responses nationwide since 1980. Fire
Information Systems will also include in Housefax reports whether a property has
been used as a meth lab, a growing
concern for Colorado home buyers.
While the report will be delivered
immediately, insurance-claims history may take longer because the data require a
homeowner's approval for release. If a homeowner doesn't authorize the
disclosure, which Abdy said "should be a red flag in itself," the information
won't be included in the report.
"We are building a price adjustment into the
site in the event that the request is denied by a seller," Abdy said.
The Housefax report will also include
replacement-cost estimates and neighborhood crime data.
"Housefax is interesting in that it provides
the story behind the story on a house," said Jon Nordmark, a co-founder of
eBags.com and a personal adviser to Abdy. "You can't judge a book by its cover;
you can't judge a house by its front porch."
Another dot-com, BuildFax, offers historical
building permit data but also targets insurers, mortgage lenders and home
inspectors.
Initially, Housefax will be a pure consumer
benefit — focused on providing reports to home buyers and sellers. The company
may eventually partner with real estate agents.
But a home inspection is still an important
call. "We're not looking to bump out home inspectors," Abdy said. "A deep,
thorough home inspection is something every home owner ... should purchase."
Housefax's forthcoming launch comes as the
country is in the midst of a housing market rebound. Foreclosures in Colorado dropped
by more than 40 percent in February compared with the same month a year
ago.
Veteran real estate broker Sonja Leonard
Leonard said she would welcome a service like Housefax. A home across from her
downtown Denver office was a meth lab about eight years ago, she said, and it's
changed hands a couple of times since.
"Those poor tenants move in and they don't
know it was a meth lab," Leonard said. "It's another layer of safety to be able
to know the facts and to get them quickly."
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