ZipRealty to Certify 'Preowned' Homes
Taking its cues from similar programs at automakers BMW and Mercedes-Benz, discount brokerage firm ZipRealty will unveil a new initiative Sunday that allows certain homes to earn "certified preowned" status, the Home Front has learned.
Homes that pass a 24-point, third-party inspection will land ZipRealty's "certified preowned" seal of approval, which the company hopes can enable properties to stand out in today's downtrodden market.
"[Prospective home buyers] don't want to buy a home and then three months later find out that the place is a money pit—I think that's everyone's biggest concern," ZipRealty CEO Pat Lashinsky said in an interview today. "So we're going to take out that risk."
The service will cost between $750 and $1,000, Lashinsky says. Consumers will pay half upfront and the balance when the home sells.
"We have a certified inspector come out and do the full inspection on the house...and then once they certify it, they warranty those things going forward for the home buyer," Lashinsky says. "If there is anything that doesn't work, the home buyers have someplace to go, and they've got a protection against it. So the home buyer basically gets rid of the worry and the concern."
Only homes that pass the inspection will be eligible for the program, Lashinsky says. "Not every home will be eligible for [the program] because they won't be able to get the certification," he says.
Lashinsky says the program, which will be formally launched Sunday, has already attracted interest from home sellers in certain markets, including Phoenix. "Some of the higher-end homes are jumping on it quicker as we are talking about it," he says.
The program is designed to appeal to both buyers and sellers. "The reality is that we hope that it's a marketing differentiator for them to help their home stand out. As buyers, it will really make them feel more comfortable in what they are buying," Lashinsky says. "I track what's going on pretty much around the country, [and] I've never seen anything like this."
Tags: real estate | housing
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Reader Comments
Fantastic Idea, especially if things are warranted for more than 1 yr
A typical home inspection only is good for a year. I bought my condo a 1.5 yrs ago and sure enough this winter my pipes are freezing, the walls are cracking, the bathroom heater doesn't work, and the shower sealing is all coming out causing water to get into the walls and the paint to peel up.
Even the most shoddy construction can usually make it though a year; while an independent home inspection is still a good idea, s certified pre-owned multi-year warranty would definitely be worth at least an extra grand at closing.
Reply to great idea
You state "I personally like the notion of a big company standing behind the inspection and the warranty." I read the article to say the inspector and warranty company stand behind it, not the broker. I would like to see that clarified. Does the broker stand behind the inspection and if yes what is the limit of liability?
The inspector and warranty company make about $500 to $1,000 for the service and the broker makes 6%. On a $500,000 dollar home the brokers get $30,000 and the inspector / warranty company $500 - $1000. I think the brokers could stand behind the program easily; they make more money on the transaction that the other parties. Property condition guaranteed by the broker commission is a great idea. You can bet the brokers would hire the very best inspectors to do the job and the public would love it. It will sell homes.
On the other hand if this is not the case I will consider offering a bumper to bumper guaranty that I inspect on certain homes for 6% of the sales price. Heck, might even do it for 4% and partner with a broker to handle the sales side.
responding to "very bad idea"
To Mr. Blackburn,
How do you know that the inspectors who are doing the inspections for the certification program are not as qualified as you? Instead of dissing the program, you might want to find out how you can go work for the company and get in on the inspections.
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