How to Pass a Property Preservation Quiz For Foreclosure Cleanup Subcontracting Work

As a smaller foreclosure cleanup business, your company can sign up for subcontracting work with larger property preservation companies. You can offer your services on a subcontracting basis for work such as inspections, repairs, lock changes and window boarding, lawn maintenance, winterization, interior trash-outs, exterior debris removal, etc.

Many of the larger companies are increasingly requiring the smaller subcontractor to complete a quiz to be considered for foreclosure cleanup subcontracting work with their companies. These quizzes are simple “weeding out” tactics so the larger companies can get the most qualified subcontractors.

Are You Familiar with HUD Guidelines?

Many of these mini-exams are designed to determine your level of understanding of HUD guidelines for property preservation work. Many of the larger companies get a great deal of their properties directly from HUD Management and Marketing (M&M) Contractors.

The M&M Contractors literally market and manage single-family properties owned by, or in the custody of HUD. (These are homes that had an FHA-insured mortgage where the homeowners defaulted on the payments. The lender or mortgage company that suffered as a result of the default ultimately deeds the home to HUD in exchange for an insurance claim payment.)

A property preservation quiz can range from the very simple to the ultra-complex. Check out some sample questions and answers below.

Sample Questions and Answers

Many quizzes contain common real estate industry definition-type questions as they relate to the Department of Housing and Urban Development. For example, a quiz may ask the following:

Question: What is the definition of Conveyance Condition as it relates to a HUD property?

Answer: You could state something very simple, such as the following: For a property to be in Conveyance Condition, as it relates to foreclosure cleanup, the property must be undamaged (undamaged by flood, fire, hurricane/tornado, boiler, etc.); the grass must be cut; the property must be sufficiently winterized; all debris and hazardous and unhealthy materials must be removed; and the property must be efficiently boarded and secured, including all pools and hot tubs, at minimum.

Another sample question you may come across on a test may be the following:

Question: Please describe in detail the steps you must take when you winterize a property with a dry heat system.

Answer: Dry Heat Systems. The hot water heater and all domestic water supply and distribution piping must be drained in a manner sufficient to prevent freezing and other damage. All valves and faucets are to remain open during process. (After draining has been completed, they should be closed.) An appropriate amount of antifreeze should be placed in all fixture traps, including in toilet bowls and tanks.

To set yourself apart as a potential foreclosure cleaning subcontractor, you could go into greater detail in your answer. For example, using the above winterization question, you could elaborate on the answer by describing winterization requirements in greater detail by pulling information from HUD guidelines (which can be found pretty easily by scouring the internet).

For example, you could include the following in your answer:

Answer — Generally properties are to be winterized once between October 1 and March 31, though there can be exceptions based on local requirements. Unless otherwise specified, winterization should include cleaning toilets and draining of all heating systems and plumbing in a manner sufficient to prevent damage and freezing. Air pressure, or in some cases antifreeze, can be used to clear system and prevent freezing.

All tasks should be performed taking local and state codes and regulations into account. 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 my come across when taking a foreclosure cleanup subcontractor quiz (see if you can find the answers online yourself):

During a trash-out you notice there is a motorcycle in very good condition in a detached garage. What should you do?

When does grass cutting season start and end in your geographic coverage area?

Describe services performed during a formal trash-out?

What steps should you take if you arrive at what is supposed to be an empty property with an order to secure it and you find out it is occupied by someone?

All of the above answers can be found in the HUD Guidelines, which, again, can be found pretty easily online.

Don’t Let a Quiz Deter You

Though many of the larger, more formalized, companies require completion of a quiz to register your foreclosure cleanup business with their companies, many do not. So search around the internet, and if a company seems to be a fit for your business service-wise and geographically, don’t let a quiz prevent you from signing up as a potential subcontractor with their company.

Forging Alliances is the Key to Growing Your Business

Do your research and attack the quiz with fervor. As a smaller foreclosure cleanup company, getting subcontracting work via the larger preservation companies that service your area can add exponentially to your bottom-line.

Many of these larger companies often service hundreds of properties at one time, across several states. Forging an alliance with the larger property preservation company is the key to really growing your foreclosure cleanup business.

Many wishes of success with your foreclosure cleanup business.

3 Secrets To Gaining Profits From Property Foreclosures

Property foreclosure is a legal process, which is undertaken by the lender when the borrower stops making loan repayments. The law enables lenders to recover their money, by allowing them the right to sell the assets, which are used as collateral by the borrowers. Instead of wallowing about losing your assets, you should look for ways to gain profits from property foreclosures. Here are some tricks to help you with this:

1. Bid At A Foreclosure Auction

One way to ensure that you don’t get the short end of the stick after losing your property to foreclosure, is by participating in the auction. While you will still have to shell out money to claim the property you originally owned, you won’t have to pay as much as you initially did. But remember, no information about the property is given other than its legal description. Also, you must pay cash, and there is no contingency allowance for financing.

2. Directly Purchase An REO

REO or Real Estate Owned properties can be targeted to attain profits from foreclosed properties. Since lenders often want to remove REOs from their books as quickly as possible, they may grant buyers favorable terms of sale, such as low or no closing costs, below-market interest rates, and low down payments. Moreover, when the property needs repair work, lenders are willing to accept offers at a discount price. To find the perfect REO for yourself, you can follow up after foreclosure sales, or by contacting a real estate agent.

3. Target Distressed Owners

Another easy way to earn profits from property foreclosures is by actively seeking out a borrower whose property is being foreclosed. There are a lot of reasons why borrowers might miss out on loan payments, such as personal crisis, loss in business, and losing their jobs. You can help them salvage their credit record and some equity, while simultaneously securing a bargain for yourself and earning profits. But keep in mind that people undergoing foreclosure won’t be in the best of moods, so you will have to patiently deal with them.

In today’s turbulent real estate market, property foreclosures are becoming quite common. But don’t fret and remember, buying from a motivated seller undergoing foreclosure, from an auction, or from a lender, will surely lead to excellent results. A few smart strategies and a detailed understanding of the loan market, will help you earn profits in this industry.