How to Price Foreclosure Cleanup Jobs Using HUD's Guidelines

Oct. 9, 2009 - PRLog -- A foreclosure cleanup business does everything from lawn maintenance, to trashouts, to cleaning, pressure washing, gutter cleaning, repairs and more.

The foreclosure cleanup industry is proving to be a lucrative business option for hardworking entrepreneurs.  With one in every 25 homes in foreclosure, per Michael Williams, Fannie Mae CEO, and with millions of adjustable-rate mortgages poised to reset in the coming years (creating the prospect of a new round of foreclosures), foreclosure cleaning startups are perfectly situated to have evergreen enterprises for years to come.

Though foreclosure cleaning is a burgeoning industry, due to the sheer number of foreclosure cleanup jobs available, foreclosure cleanup can be a business with thin profit margins if entrepreneurs aren't pricing their services for profit.

Pricing for profit can be tricky for new foreclosure cleanup business owner who don't know the ins and outs of how contracts are won, who gets paid first, where they are on the totem pole in getting paid, etc.  

A good tool to use in pricing foreclosure cleanup jobs is HUD's pricing guidelines for property preservation type companies --  BUT, to use this tool alone is a grave mistake, says Cassandra Black, owner of Foreclosure Cleanup, LLC in Atlanta.

"When using HUD's guidelines to price foreclosure cleanup jobs, foreclosure cleanup business owners should be aware of that the tables list the maximum amount HUD will generally pay the PRIMARY foreclosure cleanup contractor of a foreclosure cleaning job," says Ms. Black.

As a smaller foreclosure cleanup company (http://inkwebdesign.hypermart.net/fcbook/fcbooktest.htm), business owners should know where they are on the totem pole in actually getting paid to know how to charge using the tables. They should also learn how to figure out whether they are the primary subcontractor, number two in line, number three, etc. This will not only help them figure out how to price, but will also guide them in figuring out the best strategy to use in winning jobs.

Foreclosure cleanup business owners cannot simply look at the HUD pricing charts and use those figures for bidding, or they'll certainly overbid a job and lose out. The tables have to be dissected effectively.

Remember, the HUD pricing guidelines for foreclosure cleanup are what HUD will pay, maximum, for a service (though certain scenarios will permit them to go higher with substantiating information). The amounts listed in the charts are really for the main foreclosure cleanup contractor.

Anybody can price, but pricing "for profit" in the burgeoning foreclosure cleanup industry is an art. New foreclosure cleanup businesses should plan to do their research so they can learn how to dissect the HUD charts and price effectively for profit to win more foreclosure cleanup business.

by Cassandra Black, CEO, Foreclosure Cleanup, LLC and Author of How to Start a Foreclosure Cleanup Business (http://inkwebdesign.hypermart.net/fcbook/fcbooktest.htm), The Pricing Guide for Foreclosure Cleaning & Real-Estate Service Businesses: How to Price Jobs for Profit eBook and How to Market Your Foreclosure Cleanup Business: A Step-by-Step, Shoestring Marketing Guide for Foreclosure Cleaning Business Owners.

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Foreclosure Cleanup, LLC specializes in clearing out & cleaning up homes that have been foreclosed upon in the Atlanta area. They are authoring company of "How to Start a Foreclosure Cleanup Business" e-Book. Website: www.ForeclosureCleaningBusiness.com (http://inkwebdesign.hypermart.net/fcbook/fcbooktest.htm)