Author:
Faizi Shahidi
SVP Operations & Account Management
Property preservation management remains a central part of the mortgage value chain, yet it can be difficult to find the right partner to look after property needs. Research indicates that there are over 200,000 companies that look after property preservation in the US, and the number has steadily grown after foreclosures due to the economic recession. To finetune market understanding and zero in on the best property preservation partner for the long term, one must know precisely what to look for.
Read More: 6 Technologies Transforming the Property Preservation Industry
Why Do You Need to Outsource Property Preservation Management?
Property preservation comes into play when a real estate-owned (REO) property undergoes foreclosure but continues to be economically viable – even a valuable asset in certain cases. It ensures that the properties are maintained in an optimal condition so as to bring in revenues during a foreclosure auction. Depending on a region’s economy and market headwinds, the number of foreclosures may rise or dip, leading to a flux in property preservation management needs.
Therefore, the first parameter when choosing a property preservation partner today must be scalability. By outsourcing to a partner, mortgage businesses can reduce the efforts involved in various time-consuming (and often last mile) activities. Typically, a partner can help you in:
- Inspection services – There will be regular inspections at foreclosure properties to determine occupancy status, physical condition, new damages (if any), repair progress, etc. Often, a property preservation company will use advanced tools like the Internet of Things (IoT) devices and video calling to streamline the process.
- Repair services – The partner will work with repair contractors to decide on the best bid and execute the repair order. This is crucial to address damages due to negligence, theft, natural disasters, or time-based wear and tear. Efficient services here can reduce the market time and optimize revenues.
- Maintenance services – Similar to repairs, maintenance contractors submit bids in response to work orders for regular upkeep systems – such as cleaning, weed control, winterizing properties, etc. This capability can reduce costs in the long term.
Together, these three property preservation services help mortgage businesses derive value from foreclosures with minimal internal effort, cost burden, or logistical hassles. That is why it becomes even more important to consider the right parameters when choosing the best company for your needs.
Read More: Post-COVID 19…What does this mean for Property Preservation companies?
10 Parameters to Consider When Choosing a Property Preservation Partner
There are several things to keep in mind when assessing potential partners.
1. Response time to queries
Property preservation management involves closed coordination between multiple stakeholders (often across businesses) and dealing with data silos. The partner you choose should be able to work all through all of this and find a response to your queries on time.
2. Automation in data entry
Property preservation involves data entry at key stages, from work order creation to bid management. Therefore, the company should use some kind of automation tool to simplify the data entry process, reducing the cost burden for itself as well as you, the mortgage business client.
3. Market reputation and industry expertise
Repetition and expertise are make-or-break factors when selecting a preservation partner since the field is entirely about trust and credibility. For instance, Nexval has over a decade of experience in property preservation services, with dedicated resources skilled in inspection, maintenance, and quality control.
4. Best cost analysis
The property preservation partner should provide a cost advantage when compared to in-house services, as well as competing players in the market. Look for a compelling cost-to-service value proposition, instead of only an absolute savings promise.
5. Vendor coordination model
A property preservation manager’s job revolves around coordinating with local vendors and processing work orders on time. To achieve this, a robust vendor coordination model is required, so that you can gain from consistent cost and quality.
6. 24/7 support
Your partner should be able to provide 24/7 support, no matter which time zone they are working from. Sometimes, when choosing the best-cost region, mortgage companies deprioritize the need for convenient support. This can cause workflow bottlenecks later on.
7. Understanding of relevant laws
No matter where the partner company is situated, they should bring a solid understanding of property preservation laws relevant to your state and at the federal level. They should know which activities are necessary for compliance, data details required for audits, etc.
8. A strong hiring and talent management practice
A company’s people practices are always crucial when selecting an outsourcing partner, and the same holds true for property preservation services. The company should be able to hire, train, and retain both digitally literate young professionals as well as experienced senior executives to oversee projects.
9. Resilience and business continuity
The property preservation market is vulnerable to economic fluctuations, which requires a lot of resilience from property preservation companies. Regardless of housing market slow-downs and accelerations, they should be able to provide a steady quality of services at scale. This requires both a well-articulated business continuity plan as well as the technology to support it.
10. The quality of service
Finally, the quality and accuracy of services should be the deciding factor when choosing a property preservation partner. You can evaluate this by exploring case studies, market reviews, testimonials, and CSAT reports, pertaining to your potential partner.
Read More: How to Mitigate the Current Impacts on Property Preservation Services
Nexval is a Preferred Property Preservation Partner for US Mortgage
At Nexval, we intersect our years of field expertise in the mortgage industry with cutting-edge research in technology, to solve some of the most pressing business problems today. Our bespoke solutions are purpose-built to meet your use case, backed by proven and replicable frameworks. And, using real-time dashboards and on-demand reports, mortgage clients can maintain visibility and drive confidence across the progress pathway of property preservation.
Are you looking for the right property preservation partner for your ongoing and future requirements? Speak with our Tech Gurus today.
Frequently Asked Questions About Property Preservation
Q1. Why is property preservation important?
Property preservation is an important part of the default servicing industry. However, this goes often overlooked. When a property is left unattended and uninspected, it can deteriorate and lead to expensive repair projects, thus affecting the value of the property. Regular inspections and scheduled maintenance are needed to improve your property’s market value which will help in selling it to the right buyer at the right price.
Q2. What license a property preservation company needs?
A property preservation vendor must have a business license and a contractor license. Also, they must be aware of the homeownership laws and bank requirements so that they can ensure compliance with all regulations, like HUD, FHA, and VA guidelines, identification of health hazards, and property vacancy status.
Q3. What insurance policies should a property preservation company have?
Apart from licenses, a property preservation company must have basic insurance policies like general liability insurance, commercial auto insurance, builder’s risk insurance, and property insurance.