Your Real Estate Scope of Work: Reducing The Drama
“Why did you replace that light fixture? I said not to! I’m not paying for that!”- “Excuse me? I remember you pointing to that fixture and saying you wanted it replaced! You ARE paying me!”Yuck. Sounds like something you’d hear on a Jerry Springer episode entitled He Said. She said. Although I’ve never been in a situation like this, I’ve heard stories from others who have and have never envied a fellow investor who ‘has’ been caught up in a conversation like the above. Am I some sort of genius for never being in this kind of situation? Heck no! Is it just pure luck that I’ve dodged this bullet so far? Absolutely not.The good news is that avoiding the above types of circumstances is not rocket science and is very easy to accomplish. How so? Easy. By using what I call ‘The real estate lingo: the scope of work. The Real Estate Scope of WorkBesides the purchase agreement that maps out all the numbers of a deal, The Drama Eliminator is the most important document when part of your exit plan is making improvements to a property (to be honest, I may even argue that it is more important than a purchase agreement. Not sure I could win the argument, but I could see myself at least trying) .Not to pat myself on the back (trust me, I made plenty of stupid mistakes when first getting started), but this was an area where I chose wisely in terms of processes to implement into my business.
After doing my research and chugging through a couple of educational sources, the scope of work made a lot of sense to me and was something I wanted to at least “try”, and needless to say, I’m glad I did and have never looked back!Scope of Work: DefinitionWhat is a scope of work? Put simply, it is a “To Do List” for the property you are working on. There are many formats for the scope of work, but I will share the way my company structures ours. Essentially, we cover three things in our scope of work. The “Who”, “What” and “Where”.LogisticsBefore you even get to the “Who”, “What” and “Where”, you should address something that may seem obvious (but I overlooked it on our first scope of work). Having an area that maps out all the logistical details will ensure maximum efficiency.1) Have a professional letterhead. This lets the contractors know you are a professional company and aren’t here to play games and waste their time.2) Depending on the size of your company, you may only need to list your contact details. The point though is list “how” you want contractors to contact you after they have their bids ready.3) Define any terms and conditions of the job and bidding procedure.The “Where”This is the most crucial part. Think about it, if your people are NOT in the proper location, then all hope is lost.