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Buying or Selling a Home/Pricing for cleanout business

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Expert: - 1/12/2009


Question
Dear Russel,
My husband and I live in CO and researching whether to start a property cleanup business and market our services to real estate agents that specialize in foreclosures (but not HUD properties).  We;re trying to establish pricing and are concerned that the HUD guidelines for pricing might affect our non-HUD related business.  If we focus on bank owned vs. HUD type properties, are we still impacted by the HUD guildeines somehow (the HUD pricing's affect on market pricing for like services) Everything I read about trying to make a profit while constrained by HUD guidelines is concerning.

Thanks!

Answer
Hey, Marilyn.

If you find out what the competition is charging and then determine that you can have a viable business charging similar prices, then you should be okay.

HUD guidelines shouldn't affect you if you don't work with them. Of course, it's a selling point if you're flexible to work with both HUD and non-HUD properties.

For both types of properties, though, you will probably want to look at the property before providing a quote, so that allows you to determine if a quote within HUD guidelines will work. If not, don't quote.

Variability in pricing, though, is not what HUD seeks to prevent. We all now that the government gets ripped off by companies occasionally (remember the $1,000 toilet seats and the $500 screwdriver from a couple of decades ago) because everyone thinks the government has an unlimited supply of money and no oversight. In the case of HUD, there is oversight.

With competitive pricing and great marketing, you should be able to create a niche market and a niche economy for yourselves.

Hope that helps.

Buying or Selling a Home

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Russel Ray

Expertise

Through home inspections, I provide an education about real estate. I'm one of those rare home inspectors who has been involved in real estate in many different capacities: as a Realtor (in Texas), as a property investor/flipper, as a teacher, and as a marketing expert (for Realtors and home inspectors). I believe that my experience as a Realtor and property investor provides me with a different viewpoint about home inspections in that I work for my Clients, but when there are other people involved in helping my Clients, then I firmly believe in helping them, too. That includes Realtors (both the seller's and the buyer's), repair professionals (e.g., plumbers, electricians, etc.). If I can get all the players (seller, seller's Realtor, buyer, buyer's Realtor, and repair professionals) playing in the same sandbox together to accomplish goals as a TEAM (Together Everyone Accomplishes More), then I believe I have succeeded in my job as a home inspector. My profession is, in my opinion, much more than simply documenting the condition of a property and then take the money and run. I am also a rare breed in that I don't believe that one inspection fits the needs of all Clients, and I have led the industry in understanding that fact. For example, the goals of a property investor are far different than the goals of someone buying a property to live in. The goals of a seller (a pre-listing inspection) are far different than the goals of a buyer (a pre-purchase inspection). To that end, I offer 14 different types of inspections, e.g., STANDARD, LIST, RENTER, BASIC, MAINTENANCE, SPOT, and more. I believe in giving the benefit of the doubt to all professionals in whatever industry they represent until they prove me wrong.

Experience

Over 42 years in all aspects of real estate--building homes, renovating homes, inspecting homes, Realtor.

Organizations
National Association of Certified Home Inspector, Better Business Bureau of San Diego

Education/Credentials
Graduate of Texas A&M University; College Station, Texas

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