A Work Order is the First Step in Every Successful Job
The “work order” is most likely where 90% of those who work in this field begin. Most likely, you’ll be employed by a local or national property preservation REO/Work Orders company. Moreover, many of the bigger businesses may issue work orders to smaller foreclosure firms like yours so that the work on repossessed properties can be finished. These work orders frequently come in the form of emails and, at the at least, contain the name and contact details of the main contractor, the address of the property, and detailed project instructions.
When you receive a property preservation work order, Watch Out for These Things
Small businesses frequently get between four and six work orders at once. When they begin to get several work orders, most small businesses will be so excited that they frequently begin working without properly reviewing the work orders.
You should pay close attention to the following significant facts to safeguard both yourself and your company:
Read the specifics: Make sure you comprehend every element because your firm will soon invest time and money into completing this task. Having a solid grasp of the task will be advantageous to you and your customer in the long term.
Don’t assume: Don’t make assumptions; instead, carefully analyze each work order before taking action. Check every detail by reading it several times. Don’t just assume that the job is done because you have the work order. Call the property preservation provider to make sure the work orders are being sent to your business. Establish a phone rapport with one specific individual, such as the vendor procurement manager or the field services coordinator, so you can discuss the specifics of the work order with that person.
Work orders can be wordy and can contain lots of jargon and abbreviations. They can be confusing, too, so make sure you fully understand the work order before you begin. If there’s something you don’t understand, just ask! You don’t want to end up losing money on a job.
Much of the work order content is “boilerplate” content. This means it comprises standard pieces of text that are exactly the same in all work orders. As you go through the work order, use a highlighter pen to mark important words and phrases. You can then make a list of tools and materials you will need for the job.
Here is some sample verbiage from a Property Preservation Work Orders:
Complete initial yard maintenance if within allowable. Bid if over allowable and provide ample photos to obtain bid approval.
Notice the use of the word “allowable.” Allowable means “within a company’s pricing guidelines” or “based on the amount a company will pay you for the portion of the job outlined.”
If you see this Property Preservation Work Orders, it means the company has its own set of prices for each job. And you will only know what a company’s allowable expenditures are if you have their pricing guidelines to hand. Ask the property preservation company for their pricing table, bid chart, or pricing spreadsheet if it is not included in their vendor package or contract so you can see if it will be possible for you to complete the job and make a profit.
Notice that the Property Preservation Work Orders also states that the foreclosure cleanup company should bid if they believe the cost to complete the job would be over the allowable. This means that if their budget is too low for your company to perform the job and make a profit, you should simply place your own written bid on the job. In this case, you are not working this portion of the job, you are simply bidding on it.
Note that when working with some clients or companies, you will be able to set your own prices. However, many property preservation companies will follow HUD’s pricing guidelines when defining their allowable fees and setting their own prices. And their prices will also depend on where they are in the chain of getting paid.
Remember, it’s OK to say no to a job. You may have to decline some work orders because there may not be any profit in them for you.
Attaching photos to bids: Many companies will ask you to include photos with the bids you make on certain parts of a work order. Use your judgment on this. In some scenarios, you may not want to include photos with the bid in case you then become the unpaid eyes for the property. But if there is extensive damage that you want to document, feel free to include any relevant photos with your bid.
It is not uncommon to notice further damage at the property for which you need approval to complete. You may have already established a good phone rapport with a contact at the property preservation company, and that person may verbally tell you to go ahead and do the work. Don’t. Get the new jobs approved in writing. If you don’t, you may have a hard time getting paid because the job wasn’t on the work order.
In summary: Remember, everything is negotiable in foreclosure cleanup. But keep in mind the following in relation to work orders:
- Make sure the work order is actually intended for your company
- Find out what the company’s allowable is
- You don’t have to agree to do every work order you receive
- You should read, re-read, and ask questions about the work order
- You should submit bids and get approval for them in writing to avoid problems that may arise with verbal contracts
Plot Your Route
It’s a good idea to plan your itinerary for the day after printing your work order. You should double-check the addresses on your computer with the addresses on your work order because internet mapping tools are not always correct.
Finding addresses can be challenging in some cases, as street names occasionally change. In the past, finding a house required us to phone the neighborhood municipality, visit the county assessor’s website, and conduct a parcel search.
Gather Your Materials and Tools
Always check the Property Preservation Work Orders before you go, even though you frequently take the majority of the tools you require along with you, along with plenty of locks, carriage bolts, antifreeze, and other standard items. You’ll save time and money by doing this.
If you come and discover that more work is required, work orders will urge you to complete it. A window may be boarded, a roof could be patched or tarped, or a lock could be changed. If you can complete these tasks for the permitted, the work order may direct you to do so without requesting a bid. Some banks demand that you complete the task even if you are unable to do so for the permitted amount; they want you to do the work first before billing.
You may get a head start by gathering any equipment and materials you might need for these possible projects before you depart if this sort of provision is included in any of your work orders for the day. You won’t need to make more than one journey as a result.
When Is a Property Preservation Work Orders in Conveyance Condition?
In order to be transferred to HUD, a property must meet certain standards. The following list details the usual requirements, but this may vary depending on the property and circumstances:
- Property is unoccupied
- Personal property removed
- Outbuildings secured with property locks
- Windows boarded if required. This could be because they are broken or to prevent damage
- Roof damage reported and/or corrected
- Property has been winterized
- Utilities turned on, if required
- Pools, hot tubs and/or spas secured
Property Edition Need:
- Grass has been cut within two weeks of declaring conveyance (during the grass-cut season). This varies from state to state
- Hazardous materials removed from property
- Exterior debris and health hazards removed from property
- Interior debris and health hazards removed from property
- Property is free from any damages other than those created by roof damage, mortgagee neglect, fire, or natural disaster
- There is no outstanding work (such as locks still needing to be changed and property still needing to be secured)
The only exception to the above is if HUD has been advised of an outstanding issue and has agreed to accept the property as is.
Is this property in conveyance condition? This is a requirement every time you submit a Final Condition Work Order. If the response is no, you must provide images and quotes for the additional work required to make it conveyance-ready.
However, keep in mind that if your proposal was accepted to, for example, remove all outside debris, you cannot submit a similar bid on a subsequent repair order if you failed to identify the problem at the outset. You’ll be expected to complete this task on your own dime. Of course, this excludes any debris that has recently been dumped on the land.
The bottom line: Make sure to submit bids for all work required to get the property into conveyance condition whenever you get a Final Condition Work Order. To accomplish this job, one contractor will have their proposal accepted. I’m hoping this is you!