Foreclosure in Santa Rosa>Question Details

Joe, Home Buyer in Santa Rosa, CA

If I provided a service doing condition reports, taking photos, and doing minor clean-up at newly foreclosed..

Asked by Joe, Santa Rosa, CA Sat Feb 28, 2009

homes, who would use this type of service? Foreclosure agencies? Banks?

I would give them a detailed damage report including photos, missing items, neighborhood insight. I would then submit this "report" with property pictures via email with a quick turn around time.

Is there even a need for this type of service? all feedback is much appreciated

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The previous responders have pretty much said it all. The only foreclosed homes for which I have seen property condition reports are HUD foreclosures. The condition report is used in part to determine if the property is insurable by FHA or if there is a maximum of $5000 worth of repairs which would make the home insurable.

Are you interested in the clean up or the property condition report part? Or are you just looking for a quick way to pick up some money?

There are realtors will provide referrals to clients for "make ready" contractors when they are getting ready to put their home on the market. Rental agents also use "make ready" people to clean apartments for re-leasing.

If you're interested in the condition reporting, you might want to investigating licensure requirement in CA for home inspectors. You'll have to take classes and pass an exam and then drum up business, but a licensed home inspector has a whole lot more credibility that some joe (no pun intended) off the street who's going to give you a "property condition report."

I don't know what the going rates are in CA or Santa Rosa, but good inspectors earn a decent fee for their services.
0 votes Thank Flag Link Sun Mar 1, 2009
Joe, That's what I do as an REO agent. I am given steps in the process once we accept a listing from an Assett Managers. They all have diffeent procedures. But they usually get a hold of an agent who takes on many of the chores associated with bringing a property to market. I first have to identify the units, determine occupancy. Once I determine the property is vacant then a "field crew" wil go out and re-key the home and do any cleaning with debri removeable. Any personal property must be "posted" by me the agent or the field crew. This entails a period of time in which the previous owner/occupant has the right to re-claim. We just did a condo which took a 60 days to post and store. We inventoried the contents, boarded up the unit, and then posted the contents on the door and sent registered letter to the occupant at the address to see if they had a valid forwarding address (they rarely do!). We will NOW trashout the property which we usually will garner two bids if it exceeds $1,000.00.
Once this is done then we get bids for work needed. Sometimes we will get authorization to complete the work but lately they are selling "as-is" with NO work and makign the price very attractive. Most of the big lenders have their own contracts. Here's a strategy:
* You need to go after the smaller guys. Go to your LOCAL BANKS AND CREDIT UNIONS!! (in Santa Rosa i'd go to Exchange Bank and Redwood Credit Union) They are ALL getting property back.
* Pull up all the REO agents in the MLS (Multiple Listing Service) by having a Realtor friend let you know who they are!
* You can also drive areas of heavy REO influenced areas and make up a simple postcard advertising your services.
* You can then call the agent, leave at the property, mail to them at their office.
* You can call all real estate companies if you can't acess the MLS and ask who is handling REO's in your office?
* Post a craigslist ad using Postlets advertising what it is you do.
* Also--you're not offering MUCH! You need to add to your services!! Complete Trashout, Landscaping clean up, Window Washing, etc!
Good luck! I put out a request for folks a while back to my Realtor hot sheet list and got over 30 contractor's replying to me!!
0 votes Thank Flag Link Sat Feb 28, 2009
Joe,

This is a difficult business to enter, even with these economic times. It is not impossible, just very, very tough. This type of work generally falls under the category of "Property Preservationists". If you Google search "Property Preservation" and/or "Field Services" you will see there are literally hundreds of companies out there providing this type of work. There are many very large companies that provide this type service and you will be competing heavily with them.

Your biggest hurdle would be marketing this service as you need to reach the REO departments for the banks handling these properties and also the RE Agencies handling the listings. The bank REO departments are difficult at times to locate and generally not interested in dealing with a company that provides only a limited amount of the services they need to handle an empty REO property. As for the REO listing agencies they have their preferred vendors already and also prefer to work with full service vendors.

You can sign up with these property preservation companies as a sub-contractor and perform some of the services they offer for the REO properties. However, don't expect to make any useful income from this unless you have many, many REO's in your immediate area, are ready to hustle, provide more services than what you are listing and are very organized. For example, a property condition report is just a quick walk around the property and take a few photos. For this the property preservation companies pay their subcontractors $10 - $15. If you have a lot of these all in one zip code, and on the same day, then you might make a few dollars off of it. If not then the time and gas alone would mean you lose considerably.

If you are going to run your own business then also be ready to be insured with both General Liability and potentially Errors and Omissions insurance. I know an individual in our area who performs property preservation as a full time business and services some accounts directly but most as a subcontractor. His E&O alone is $10,000 a year and his GL another $4000. Your costs might be different but your homes there are also a much higher value.

You mentioned providing detailed damage reports, photos, neighborhood conditions, etc. Quite frankly most banks don't particularly care about details. All they are interested in is securing the property, getting it listed and getting it sold. Unfortunately banks are generally not required to disclose any property defects and buyers are left completely on their own to ensure the condition of the property they are buying. As such the banks, nor the REO listing agencies, are interested in detailed reports of any type.

It's not impossible to break into this business, just very, very hard and will require a huge amount of marketing, time and potentially money. Good luck and make sure you research this heavily before expending money on equipment, insurances, etc.

Emmanuel J. Scanlan
PS Inspection & Property Services LLC
http://www.psinspection.com
214-418-4366 (cell)
TREC License # 7593
International Code Council, Residential Combination Inspector #5247015-R5 (Electrical, Mechanical, Plumbing and Building)
Texas Residential Construction Commission, Third Party Warranty Inspector #1593
Texas Residential Construction Commission, Inspector, County Inspection Program
Texas Department Of Insurance, VIP Inspector # 08507061016
Hayman Residential Engineering Services, Field Technician
CMC Energy - Certified Energy Auditor

Knowledge is power, but sharing knowledge brings peace!!
Web Reference: http://www.psinspection.com
0 votes Thank Flag Link Sat Feb 28, 2009
The companies I can think of are: fidelity Field services and M&M mortgage services. You may also want to check google under proeprty inspections for mortgage companies. There are some requirements and education required too.
0 votes Thank Flag Link Sat Feb 28, 2009
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