As a smaller foreclosure cleanup business, your company may sign up to subcontract work with larger property maintenance companies. You can offer your services on a subcontract basis for jobs such as inspections, repairs, lock changes and window boarding, lawn maintenance, winterization, indoor trash removal, outdoor debris removal, etc.
Many of the larger companies are increasingly requiring the smaller subcontractor to complete a questionnaire to be considered for foreclosure cleanup subcontracting work with their companies. These questionnaires are simple “elimination” tactics for larger companies to obtain the most qualified subcontractors.
Are you familiar with HUD guidelines?
Many of these mini-quizzes are designed to determine your level of understanding of HUD’s guidelines for property conservation work. Many of the larger companies source much of their property directly from HUD’s management and marketing (M&M) contractors.
M&M contractors literally market and manage single-family properties that are owned or controlled by HUD. (These are homes that had an FHA-insured mortgage where the homeowners defaulted. The lender or mortgage company that suffered as a result of the default ultimately titles the home to HUD in exchange for an insurance claim payment.)
A property conservation questionnaire can range from the very simple to the ultra-complex. See some sample questions and answers below.
Sample Questions and Answers
Many questionnaires contain common questions of the definition type of the real estate industry in relation to the Department of Housing and Urban Development. For example, a questionnaire might ask the following:
Ask: What is the definition of Condition of Transportation in relation to HUD property?
Answer: It could state something very simple, such as the following: For a property to be in Leasing Status, as it relates to foreclosure cleanup, the property must be undamaged (not damaged by flood, fire, hurricane/tornado, boiler, etc.); the grass must be cut; the property must be sufficiently prepared for winter; all hazardous and unsanitary debris and materials must be removed; and the property must be efficiently protected and insured, including all swimming pools and hot tubs, at a minimum.
Another sample question that you might encounter on a test might be the following:
Ask: Describe in detail the steps you must take when winterizing a property with a dry heat system.
Answer: Dry Heat Systems. The hot water heater and all domestic water supply and distribution lines must be drained sufficiently to prevent freezing and other damage. All valves and taps must remain open during the process. (After drainage is complete, they should be closed.) An adequate amount of antifreeze should be placed in all accessory traps, including toilets and tanks.
In order to differentiate yourself as a potential foreclosure cleanup subcontractor, you could provide more detail in your response. For example, using the winterization question above, you could elaborate the answer describing the winterization requirements in more detail by pulling information from the HUD guidelines (which can be found quite easily by searching the Internet).
For example, you could include the following in your response:
Answer — Typically, properties must be winterized once between October 1 and March 31, although there may be exceptions based on local requirements. Unless otherwise specified, winterization should include flushing toilets and draining all heating and plumbing systems sufficiently to prevent damage and freezing. Air pressure, or in some cases antifreeze, can be used to flush the system and prevent it from freezing.
All tasks must be performed in compliance with state and local codes and regulations. Before and after photos, along with other supporting documentation, must be submitted for reimbursement.
More sample questions
Here are a few more sample questions you may run into when taking a foreclosure cleaning subcontractor test (see if you can find the answers online yourself):
During a garbage collection, you notice that there is a motorcycle in very good condition in a detached garage. What should you do?
When does the mowing season start and end in your geographic coverage area?
Describe the services performed during a formal garbage collection?
What steps should you take if you arrive at what is supposed to be a vacant property with a warrant to secure it and discover that it is occupied by someone?
All of the answers above can be found in the HUD Guidelines, which, again, can be found quite easily online.
Don’t let a quiz get you down
Although many of the larger and more formalized companies require you to complete a questionnaire to register your foreclosure cleaning business with their companies, many do not. So do some research online, and if a company seems like a good fit for your business in terms of services and geographically, don’t let a questionnaire stop you from signing up as a potential subcontractor for your company.
Forging alliances is the key to growing your business
Research and attack the quiz with fervor. As a smaller foreclosure cleanup company, getting subcontracted work through the larger conservation companies serving your area can exponentially increase your bottom line.
Many of these larger companies often service hundreds of properties at the same time, in multiple states. Forging an alliance with the largest property preservation company is the key to truly growing your foreclosure cleanup business.
Best wishes for success with your foreclosure cleanup business.