December 1, 2023

Bucks: A Background Check for That House You’re Considering

Buyers typically rely on home inspectors to warn them about possible problems with a house they want to buy. A new service called BuildFax is offering additional documentation about a building’s history that may prove helpful to prospective purchasers, and even sellers.

BuildFax describes its service as a “background check” on a home that can complement an inspector’s report.  The service has primarily been marketed to insurers, appraisers and building and real-estate professionals but is also available to consumers.

The company charges $39.99 per analysis, but BuildFax is offering free reports to consumers through July 31. The free version is the same report you would receive if you paid, and it doesn’t obligate you to buy anything else, says Holly Tachovsky, BuildFax’s co-founder and president. “It’s must-have data for consumers,” says Ms. Tachovsky, “so they can make an informed decision about the house as it really is.”

The service, based in Austin, Tex., has compiled a database of permit information from building departments in more than 4,000 cities and counties. It mines that data by address to create a summary report showing major renovations or repairs done on a home, like roof replacements, additions or systems work like plumbing or air-conditioning. Consumers receive a report that shows the dates and scope of the project, as well as the contractors who worked on the property.

The reports can help sellers prepare accurate disclosures and help home buyers evaluate whether the seller’s disclosure is complete. Discrepancies between what the building permit says and what the seller says may raise red flags, or at least provide points for negotiation on price.

Ms. Tachovsky recalls that when she ran a BuildFax report for her sister-in-law, her relative learned that the house’s heating system was probably much older than she had been led to believe when she bought the property. Had she had that information when negotiating the purchase, she might have asked for a price reduction to cover the cost of a new system.

BuildFax says it offers data on properties in 60 percent of the country. Rules about what sort of work necessitates a building permit vary from location to location. In general, however,  major renovations — like, a significant remodel or the addition of a second story on a home — always require a permit.

Given that the residential real-estate market today is generally a buyer’s market, the service might help a buyer narrow down choices. “If one house has a fully permitted remodel, you know it wasn’t wired by someone’s cousin,” Ms. Tachovsky says.

The reports can also help identify new systems that may make the home eligible for insurance discounts. Some insurers, for instance, will offer discounts on homeowners premiums if a roof is less than five years old, she said.

Would you pay nearly $40 for a report on a home’s history?

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