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.”
Andy Vuong : 303-954-1209, firstname.lastname@example.org or fb.com/byandyvuong