This Popular Business Model is Not in Your Best Interest
I recently received a phone call from what seemed to be a third party firm wanting me to do an inspection. This isn’t uncommon as I work with third parties that coordinate inspections for investors fairly often. However, this one seemed a little different so I did some research. The company is called Inspectify and is becoming more prominent in the real estate/home inspection industry. Inspectify claims to be a “completely free managed marketplace for home inspections” (https://www.getinspectify.com). The business model and approach used by this company is becoming more popular throughout the market place (think Zillow but for inspection). I believe this type of business is a trend that is not best for anyone. While my opinion is from a biased home inspector’s perspective, I hope you see why this broader business model is not in your best interest.
After doing some research I found that Inspectify offers to hire the lowest bidding inspector to inspect a home before it goes on the market. The inspector has zero contact with anyone buying or selling the home (read that again). As anyone who has bought or sold a home knows, having an unbiased third party inspector to discuss the condition of your home is extremely important. I cannot imagine not having an opportunity to discuss an inspection with my client. Inspectify’s website boasts that with their new “Inspection Protection” program buyers were FOUR TIMES more likely to waive inspections. Yikes!
If you read the fine print an Inspectify contract is offered through Hippo Warranty Solutions - a home insurance company. Essentially Inspectify appears to be gathering clients’ data for a gigantic insurance company. See their privacy policy: https://www.getinspectify.com/privacy-policy. Inspectify’s ultimate goal is not to streamline the process of home buying and selling - they offer nothing novel in this area. Instead, their goal appears to be creating a third party who takes their cut while making money from collecting your data.
Their website states “Buying a home is a stressful process. Rest easy while we take care of the legwork for your home inspection (or stress about another part of the deal instead).” Do they really make this easier? They are not removing a party in the process, but instead adding or at best replacing a party (the inspector), and creating an unnecessary third party. Worse, this third party takes a cut of the inspection fee, has never seen the home you’re investing hundreds of thousands of dollars into, is not a certified inspector, and is collecting your data to use for their financial gain. When you click on their link to schedule an inspection it looks like any other modern inspector’s online booking system - nothing novel. If scheduling an inspection is cumbersome and you are playing phone tag with an inspection company my advice is to find different inspector (perhaps www.vantagekc.com) because easy online scheduling has become an industry standard.
Inspectify claims to only work with certified and highly reviewed inspectors to ensure high quality inspections. They have even tried to develop their own report software and offer it for free to inspectors. I am not sure this has taken off yet but I do know when Inspectify contacted me they said they found me after looking at one of my reports. I use Spectora report software - the best the industry has to offer. I suspect they are trying to model their software off Spectora which is certainly not a problem (I don’t blame them). However, inspection report software is not cheap nor easy to develop/maintain and is not something that is just offered for free. I imagine that only a company making a lot off of their clients’ data could afford to offer free software. Inspectify has created their own a 5-star review system to rate inspectors. The problem for the consumer is that these ratings are based only on comparing Inspectify inspectors to one another. These ratings are not an accurate measure of the quality of an inspector because the vast majority of inspectors do not work with/for Inspectify and those who do are typically the type of inspector who provide the lowest bid. At this point claiming to be a highly rated inspector by their standards holds about as much weight as the “World’s Best Cup of Coffee” sign in the movie Elf.
On the surface this type of business model may sound great to the consumer; after all you may save a few bucks. Many aspects of it are also appealing to inspectors and realtors. However, after looking into Inspectify it is very clear to me that I want nothing to do with this company nor others who operate similarly. I believe it creates a race to the bottom for service providers for the sake of a third party profiting from clients’ data. Worse, it removes direct communication and accountability between people buying homes and the professionals they hire throughout the home buying process. Buyer beware.